There’s always something to howl about.

Month: August 2007 (page 7 of 9)

Sun Microsystems draws free pictures of the twenty-first century; to be shown to barbarians to illustrate the path to relevance

What’s the opposite of an antiquated product in a useless form-factor being hoarded behind a paywall? Sun Microsystems has developed the world’s fastest microprocessor — and is making all of the design details available by Open Source:

To add fuel to the fire, the blueprints for our UltraSPARC T2 (I personally like the moniker, “Niagara 2” – named after Niagara Falls, btw, and the great volumes of water that pass over them), the core design files and test suites, will be available to the open source community, via its most popular license: the GPL. Making Niagara 2 the only commodity silicon whose core designs are available to the open source community – whose strength, and market power, only grows by the day.

The economics of walls and safes and locks and chains is based in fear, hostility, suspicion, anger and doubt. Resources are presumed to be scarce, so if I don’t hoard them with an ugly vigilance, I’ll starve.

The economics of abundance is built on the opposite premises: Openness, candor, an effortless joy that flowers into pure splendor: The only true economic resource is human intelligence, a resource infinite in potential. By sharing with you everything I know, I will enrich us both: You will have the wealth I have created so far, and I will have the wealth you will create from that starting point.

These startling innovations are as new as Socrates, at least, so people can be forgiven for not having learned them after twenty-five centuries’ time. But there are two unhappy consequences to the economics of hoarding. The first is the tax on human dignity that comes from wresting treasure away with a thief’s cunning, hiding it and cowering over it, like the baubles in a raven’s nest, with a stingy, guarded greed. But the second is the vast riches that are foregone by this idea of wealth as trinkets to be withheld, rather than as ideas to be shared and cultivated.

We come back to Cain and Abel. Abel’s wealth is the raven’s wealth, gems and metals, portable and enduring but finite in quantity. Cain’s wealth is the fruit of Read more

When Lenders Stop Lending, Another Lender Lends.

The title is a funny play on words from advice Jeff Brown and Ron Feinberg gave me last week. When I returned from Inman last week, the market started melting down. I pride myself on my cool head but some days the Awshits sneak up and dominate my mind; Friday was one of those days.

IndyMac- discontinued neg-am

Bear Stearns- repriced neg ams by adding 2.25 points to the fee (thievery)

American Brokers Conduit- I didn’t know they were owned by American Home Mortgage until it was too late.

World Savings- a workable solution but their margins are so expensive. Now, they’re cheaper than the rest.

Jeff Brown told me that some smart company would figure out the void in the market in less than one month. Ron Feinberg said six weeks. I called the 2-3 borrowers and explained that the repricing may have made the neg-am loans a poor recommendation; it just didn’t fit into the plan I had created for them.

Look who slipped in the back door with killer pricing and terms. I’ll be damned! It took less than a week!

Looking for a traditional listing agent when Redfin.com lets you down? 60 Minutes has got that covered, too!

Beau Betts in Seattle writing about the 60 Minutes commercial for Redfin.com:

60 Minutes also interviewed Deborah Arends from Re/Max and represented her as having the “old school” real estate mentality and didn’t really portray her in the most positive light.

Well, I just started laughing when I was browsing the mls just now looking for home for a client of mine and saw a house that I think could possibly be a good candidate for them. One thing that I noticed was that the home had been on the market for almost 100 days. Here’s the amusing part, the home was originally listed by Redfin back in late April and they just lost the listing to none other than Deborah Arends.

Arends took a beating by proxy for the rest of us. It’s good to see her getting a bit of her own back.

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Greg plays PHP games with ZeeMaps: The story for July in the F.Q. Story Historic District of Phoenix

Kris Berg and Jonathan Dalton have been making good use of ZeeMaps to show sales activity in their local market areas.

I’ve been digging this, but at StarPower, I discovered that I am smart and lazy — good at figuring out how to avoid hard work. So: I built a little bot that, in conjunction with our MLS system, will build ZeeMaps of ideas I want to illustrate visually. Here, for example, is MLS activity in the F.Q. Story Historic District of Phoenix for the month of July: Active, Pending, Expired and Cancelled. I have the bot set up to use different colors for Sold, Active With Contingencies and Temporarily Off Market, as well.

We’ll use this for DistinctivePhoenix.com, to show off the neighborhoods we farm, but we will be able to use it for any purpose we can imagine — listing appointments, price-adjustment meetings, etc. We can make a map out of any search we can run. It’s not a mapping search interface, but it’s something while we wait to get a mapping search interface.

New York Times discovers Earth: “Mr. Sulzberger, tear down that wall!”

Says the New York Post, the New York Times is about to remove the paywall that conceals from public awareness its once-famous (even if smarmy and tendentious) op-ed columnists:

The New York Times is poised to stop charging readers for online access to its Op-Ed columnists and other content, The Post has learned.

After much internal debate, Times executives – including publisher Arthur Sulzberger Jr. – made the decision to end the subscription-only TimesSelect service but have yet to make an official announcement, according to a source briefed on the matter.

The timing of when TimesSelect will shut down hinges on resolving software issues associated with making the switch to a free service, the source said.

Times spokeswoman Catherine Mathis would only say in an e-mailed statement, “We continue to evaluate the best approach for NYTimes.com.”

While other online publications were abandoning subscriptions, the Times took the opposite approach in 2005 and began charging for access to well-known writers, including Maureen Dowd, Frank Rich and Thomas L. Friedman.

I’m told there is something like this in real estate — news of dubious value jealously hoarded behind a paywall — but, since I don’t pay for ordinary information, I can’t say for sure.

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In Search of Excellence

That, of course, was the name of a best-selling management book that came out in the early eighties. It not so much defined my market philosophy as confirmed what I’d already learned from Nordstrom: Concentrate on excellence and rewards will follow. Concentrate on rewards, and you’re pretty much assured of being consigned to mediocrity.

What’s been interesting to watch in the twenty five or so intervening years isn’t so much that nearly every business gives lip service to the tenet, but what’s happened to the definition of ‘excellence’. The education establishment meets failing test scores by dumbing down the tests. Grades are allocated not on merit, but on the perceived sensitivities of the students, just as soccer games are played without keeping score so as not to hurt anyone’s feelings. You can get an undergrad English Lit degree at the University of Washington without ever having studied Shakespeare. In the frenetic twenty-first “I want it now!” century reading has become a chore, replaced by vapid visual stimulation and fifteen minute podcasts. Writing skills have devolved to YouTube. Joseph Conrad need not apply.

So what? Here’s so what: Words matter. Reading builds vocabulary, writing exercises its use. But not only is someone who draws on 150,000 words able to communicate concepts better than one who’s limited to the normal 50,000, but he or she is infinitely better able to conceive them in the first place. I’ve said — often — that good writers invariably make good thinkers, largely because they do.

All of which was going through my mind as I read this weekend’s BHB posts.

Whew. Excellent.

Before I started my own RE blog I searched the internet to see how others were doing it. Lots of people giving advice, most of it in the genre of Kris’ exquisite satire: Keep it short, be witty, illustrate cleverly. Most blogs seemed to keep diligently to that formula, but two things were apparent: that A) Most were blogging just to be blogging, and not to be actually saying anything; and B) the “Keep it short” formula was necessary to mask an inability to string words Read more

Vale, carne vale: Recasting The Odysseus Medal as a carnival of real estate weblogging excellence

I’m pretty fed up with the Carnival of Real Estate. It is what it is, and there have been times over the past year when it has blown tender kisses toward the sublime. But much too often it has chosen to rut around in the mud, and, in any case, it is much too much of everything to be anything at all.

This is not good.

There is a Carnival of Real Estate Investing and a Consumer-Focused Real Estate Carnival, both of which seem to do a decent job of staying on-topic. The Carnival of Real Estate should be devoted to excellence in real estate weblogging, broadly defined. Instead it has become a Carnival of Solipsism, a space where the inherent subjectivity of judging has given way to an overarching, overreaching subjectivism: The universe is whatever that week’s judge says it is. An entry that would have been judged the best by any rational standard can get buried beneath the judge’s whim, the testy assertion of a right to supplant enduring standards of excellence with a momentary fit of pique.

In rebuttal, one word: Bah!

For a first thing, I am done with the Carnival of Real Estate. I have supported it since its birthing. BloodhoundBlog has entered a post for every new edition, winning, despite everything, more than any other weblog. No more. I will no longer submit posts from BloodhoundBlog to the CoRE. If individual contributors wish to enter their posts, that’s their business, but I will no longer make an official entry from BloodhoundBlog, nor will I enter any of my own posts.

Second, I have recast The Odysseus Medal as a new carnival of real estate weblogging. This is the description of the new carnival from its home page:

A weekly carnival for real estate, mortgage, real property investing and housing weblogs — very broadly defined. The Odysseus Medal is awarded to the highest quality writing in real estate weblogging.

The Odysseus Medal competition will be hosted at BloodhoundBlog every week, and it will be judged by me alone. That is arrogance personified, but by doing things this way webloggers will be assured of Read more

The Carnival of Real Estate . . .

…is up at RealEstateUndressed. Host Larry Cragun got around our having broken the rules on entries by breaking all the rules. In consequence, this week there will be two consumer-focused real estate carnivals and no Carnival of Real Estate.

Even so, our friend John L. Wake took second place with Landscape staging your home.

Michael Cook came in fifth with Can I Still Get a Mortgage in Today’s Lending Markets? With Cold Hard Cash and Great Credit, Certainly; Otherwise?

I respect the right of each weekly judge to do what he or she wants about the Carnival — the lord knows we do. But much more than that, I respect, admire, revere and exalt actual excellence in real estate weblogging. We’re going to do something different from now on. News later

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Black Pearls: Two practical uses for video in real estate marketing

Someday soon I’m going to write a post with a title like “Why all available real estate video solutions suck eggs.” Here’s the one-word summary as a teaser: Bandwidth.

In the mean time, here are two ways of using video in real estate marketing that are actually useful and practical right now. These qualify as Black Pearls because Cathy thought up one of them while we we at the StarPower Conference.

Black Pearl #1: At your initial listing appointment, videotape the seller’s tour of the home
If you do this, you’ll able to revisit everything you saw in the home, to review every detail the seller divulged and to provide the basis for your notes on repairs and staging. You can use stills or clips from the video to show the seller what you want corrected. You may even be able to use clips from this video for your marketing video — even though all available real estate video solutions suck eggs.

Black Pearl #2: Videotape the seller’s instructions on the major systems
This may happen at the final walkthrough or some earlier time, but if you’re representing buyers of homes with complicated amenities — pools, spas, septic tanks, home theater or central vacuum systems — you should be writing training classes into the purchase contract. We use language like this: “Seller agrees to hold a two-hour class for Buyer at any mutually-agreeable time prior to Close of Escrow to teach the care and use of the pool, septic system and any other major systems, tools or appliances on the property.” If you’re the buyer’s agent, you should videotape this class, but you should do it even if you’re the lister if the buyer’s agent does not. Deliver it to the buyers as a DVD, split into chapters by major systems. This is a closing gift that keeps on giving.

We have a third idea, videotaping the reactions of visitors to our open houses, HGTV-style, but they’re always too shy. Besides, all available real estate video solutions suck eggs.

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Wagging the dog at the Carnival of Real Estate

Our policy is that Cathleen Collins chooses our nominees for real estate carnivals. I trust her to be objective, particularly about my posts. The contributors are polled for nominations on Saturday night, with their suggestions going to Cathy. Sometimes I overrule her, and sometimes she asks me to cover for her.

This week, Cathy got her short list down to four posts, one each by Morgan Brown, Kris Berg, Brian Brady and me, but she didn’t want to choose from there. She threw it over to me — heavy hangs the head.

I checked and saw that nine of our fifteen contributors had written in the past week. So I entered everything of moment from each of us. That’s a violation of the Carnival of Real Estate rules, but this is my attitude: If we’re going to lose anyway, let’s lose our own way.

These were the posts that I entered, starting with Cathy’s short list:

Morgan Brown:

Kris Berg:

Brian Brady:

Greg Swann:

Michael Cook:

The Mortgage Tax Act of 2007

Michael Cook did an excellent job explaining the two noteworthy debacles of last week. American Home Mortgage went belly up and Bear Stearns may be downgraded to a negative rating. Thursday afternoon, Angelo Mozilo of Countrywide Financial, did his best Nero impression by muttering two words to analysts; “Don’t Worry“.

Mr. Mozilo may be parroting Bobby Mc Ferrin but the rest of the lenders aren’t. Non-conforming lenders readjusted to what they now call “risk-adjustment” pricing. Basically, at Wall Street’s direction, the large lenders added about a 1% fee to the stated income and no income documentation loan programs. Loans that conform to FNMA or FHLMC guidelines, with verified income and assets, remain at their original pricing. There still are 100% financing programs available to those with good credit and the ability to make the payments.

Have borrowers who choose not to disclose income documentation become personae non gratae overnight? Not really. We have always known that light documentation borrowers, who can not demonstrate an ability to repay the loans, have been a higher risk. There has always been a price adjustment for that risk. Large down payments (20-30%) used to be the norm for those programs. It wasn’t until after our country was attacked, in September of 2001, that Wall Street started reaching for yield. The easy money policy and anemic stock market of that post-attack economy left the investment bankers STARVED for business; they found that business in high risk home borrowers.

This brings us to the Mortgage Tax Act of 2007. The way out of this mess is to originate more product. That sounds counterintuitive, doesn’t it? Well, if lenders can originate more loans, they can spread the risk across more assets. The risky loans (stated and no doc) now have a higher risk adjustment. That risk-classified pricing model is not unlike the insurance industry’s move to segregate tobacco users from non-tobacco users. Smokers are charged a higher insurance premium than non-smokers because their life expectancy is lower. That’s what the lenders Read more

Connect the dots: Who’s buying, who’s selling, and what is being sold

Mind if I tell a story?

My dad earned his living as a sales rep. He sold high end paint and wallpaper tools in a tri-state territory. There were years when he would be out the door by 5:00 a.m. on Monday and we would see him about 3:00 p.m. Friday afternoon. He worked hard, but he is very smart and driven.

When we were a little older, he would on occasion, take one of us kids to a trade show with him during the summer. I can’t speak for my brothers, but I always enjoyed the chance to get away, the chance to see something new, and the chance to spend some one-on-one time with Dad. He was a great story teller and he would tell me all kinds of things: About his life, his parents (they died by the time I was three), how to track deer, how to fish, how to change a transmission, how to dump a boyfriend either gently or not-so-gently whichever the situation called for. You know, the really important life skills that every girl should know.

We would go to these big hotels or convention centers in a big city. Dad would unload his display, I would help him set it up, then it was “see ya at five”. Off I’d wander. To me, back then, a trade show was a cool thing. I would wander up and down the aisles, mouth open, eyes wide, looking at stuff. All this stuff! Who knew there was so much stuff to be had? Bright and shiny stuff, weird stuff, funny stuff, just stuff. I’d go back to Dad’s booth and report about the stuff I saw. Now here’s the fun part, Dad would give me the back story of that company and why their stuff was crap, or the company was full of crooks, on a rare ocassion a particular company was worthy of praise. I learned that everything is not as it would appear on the surface, and there is usually more to a story than what you are seeing.

So I grew up in the sales world. Read more

Expect a Market Slowdown: A quick thought piece for the more financially minded…

Buyers and sellers should be aware of a general economic slow down in all markets. Everyone will feel the effect of the leverage finance and subprime markets. Since I have been writing about the subprime markets for quite some time, I will focus briefly on the effects of the decline in the leverage finance market.

Leverage finance typically covers loans banks and other financial institutions lend to corporations or large private buyers. Companies like Blackstone use the leverage finance market to buyout companies and REITs. Over the past few years there has been a significant up-tick in Mergers & Acquisitions, leading to strong economic growth. As finance markets close (or shrink significantly) businesses will be less able to get large loans at favorable rates. As buyouts and mergers shrink, expect a dip in the equity markets. Looking at the Dow over the past week bears this out.

Very few people beyond the financial community pay attention to the leverage finance markets. These markets significantly impact the large commercial real estate market. When financing tightens at the top, the price effects trickle down. This could mean a significant negative impact on the commercial real estate market is coming.

All of this will create a drag on the economy, which will serve to slow down most, if not all, real estate markets. Unfortunately this could force even more defaults, putting many real estate markets in quite a tailspin. Buyers with excellent credit that can afford to wait six months to a year to buy will have their pick in most minor markets and increased negotiating leverage in major markets.