Real Estate and Technology News for Agents, Brokers and Investors | Inman News
Real estate company makes the news
Matt Carter
Inman News
In the fall of 2006 -- when housing sales had cooled, but before "credit crunch" became a household term -- Alex Perriello had some advice for Realtors gathered in New Orleans for their annual convention.
Don't leave it to the news media to tell the story of what's happening in your local market, the president and CEO of Realogy Real Estate Franchise Group said, because news outlets emphasize the bad news.
Last month at Real Estate Connect San Francisco, Perriello was singing the same tune. He said consumer confidence in real estate has been shaken by alarming stories that, because they are focused on national statistics, don't reflect local market conditions.
While some media outlets undoubtedly do a better job than others at covering their local housing markets, the perception that the media cannot or will not give the industry a fair shake is a common one.
In the fall of 2007, Prudential Georgia Realty decided to take matters into its own hands, launching a series of quarterly video reports that look at what's happening at the national level and compares and contrasts the situation with the Atlanta market.
The videos are narrated by Prudential Georgia President and CEO Dan Forsman, who reads a script from a teleprompter on a studio set that resembles those used for professional newscasts.
"We see sensationalist headlines about the real estate market every day now," Forsman kicks off the brokerage's latest video. "Yes, that does get attention, which does sell advertising. That is how the media makes money. So let's review some of the facts and opportunities that will help you make money."
Forsman introduces guests and delves into statistics and projections that are more in depth than what you'll see in the typical television newscast. Points are illustrated by slides that run in synch with the video on an adjacent screen. Like a PowerPoint presentation, the slides include charts, statistics and a screenshot of the brokerage's Web site.
The video doesn't gloss over recent national trends in delinquencies and foreclosures, citing recent record-breaking figures from the Mortgage Bankers Association. But taking a page from the playbook of MBA and the National Association of Realtors, Forsman emphasizes that the problems are concentrated in seven states.
Forsman says California, Florida, Arizona and Nevada "had huge run-ups in prices, driven by speculators and flippers." It's a different story in rustbelt states of Michigan, Ohio and Indiana where demand is off because those states have been losing population, he says.
Forsman touches on the continuing turmoil in the lending industry, and notes projections by First American CoreLogic Inc. and Moody's Economy.com that delinquencies are expected to continue to rise for the next 12 months, and that one in four homeowners may be upside down by April 2009.
Having established some credibility with viewers by tackling those unnerving subjects, Forsman shifts gears to a discussion of the Atlanta market.
"We must remember that all markets go through cycles. Like the dot-com bust, the housing market will in fact correct itself. There are some incredible opportunities to buy great properties that will bring handsome returns over time," Forsman says as he segues into the Atlanta market. "We must also remember that real estate markets are local."
Hurdles more than technical
Forsman was the natural choice to present the Prudential Georgia videos, said Tony Floyd, a senior vice president at the brokerage with a background in sales and marketing for tech companies.
"There was never any debate of anybody else doing it," Floyd said. Not only does Forsman speak at many local events, but the company holds regular Webinar presentations for employees over the Internet.
"We have been very blessed in that regard," Floyd said. "A lot of leaders of real estate companies would be petrified standing there when the lights turn on, whether they have a script or not."
It took some convincing to persuade Forsman to use a teleprompter and a script, because he wanted to be authentic and speak off the cuff, Floyd said. But with the volume of information to be presented, the shoots go more smoothly and there's less editing if presenters stick to a script, he said. Forsman is involved in editing the scripts, which are sometimes changed on the fly once shooting has begun if something doesn't sound right or new information comes in, he added.
Floyd's tech experience gave him an understanding of video production and the use of networks to stream high quality video over the Internet. Prudential Georgia works with Atlanta-based Multicast Media, which partners with a "big gorilla" in content distribution, Akamai, to break up the video into pieces that are streamed from servers around the world.
While Floyd said such productions are within the reach of any similarly sized brokerage, he warned about diving into such a project half-cocked.
Done well, video is such an incredible medium for the Internet," Floyd said. "Done poorly, I think it hurts you more than it helps you."
Each video requires extensive research, he said. Scripts are edited and rewritten. After guest presenters have been lined up and video footage shot and edited, the technology must be in place for the videos to be distributed and seen.
"It's classic producing work that most people in real estate have not done," Floyd said. While there are third-party companies that will produce a video from conception to Web hosting, that can get quite expensive, he said.
The technical requirements of Web video aren't daunting to those with expertise in the field, but there are human issues to take care of, too. It can take some work to get everyone to agree to what does and does not go into a script, and how the information will be presented.
"There are always people on your teams who are scared to death," Floyd said. "When you tell the truth, people may not like it. Give Dan a lot of credit, the culture of our company has always been more straight shooting and open, with honesty at all levels."
Floyd said the videos strive to present information in an unbiased way, and report details that aren't found in news media reports.
"We believed that the story wasn't really being told well in our market, and people get so confused about the local market versus the national market and what that all means," Floyd said. "We decided we needed to take a leadership role and be a thought leader in our market."
Dissecting the local market
In the video, Forsman says problems in housing markets may have begun "as the story of seven states," but that now, "the rest of the country has clearly caught the real estate bug."
He begins his presentation on the Atlanta market by acknowledging that since last summer, it's not been immune from the impact of the national downturn. In the spring of 2008, sales volume was down 33 to 36 percent from the same time a year ago, he says, citing figures from Atlanta-based forecaster SmartNumbers.
"The expired and withdrawn listings continue to set new records, signaling frustration from sellers," Forsman says, continuing with the straight-talk theme.
Some Realtors have little use for the Case-Shiller index, saying its limited coverage area and methodology exaggerate price declines (see story). But Forsman is comfortable citing a Case-Shiller finding that Atlanta home values were down 6.5 percent year-over year in March. He even takes the Case-Shiller index a step further, predicting the next round of numbers will show even greater price declines.
"Property values have been driven down by large numbers of foreclosures, aggressive new-home incentives, and very motivated sellers of resale properties," Forsman says. "We believe that Atlanta home values have actually dropped 8 to 10 percent from last year."
But then the Prudential Georgia CEO switches gears. Atlanta is at or very near a bottom, he says, presenting "an incredible opportunity for buyers."
He introduces David Ellis, executive vice president of the Greater Atlanta Home Builders Association, who presents a segment on the new-home market -- the third of five chapters of the video.
Ellis lays out a scenario where a cutback in housing starts, coupled with higher building and development costs, will inevitably push new-home prices up.
"The facts are clear," Ellis says. "There's no better time to buy a new home in Atlanta than right now."
Forsman issues a similar warning and "call to action" in the video's concluding chapter.
"There is no guarantee that these wonderful buying conditions will last," he says. "It is an election year, we have a potential recession looming, inflation could return due to gas prices, and natural disasters or terrorist events could occur at any time."
In the video, Forsman says he thinks home values will begin increasing in 2010 and 2011 as inventories drop and population increases.
"We will actually see a seller's market return in 2010," Forsman predicts. "Resale inventory will be back to normal, foreclosures will be down, and new-home engines will not be able to crank up and start quick enough to catch up."
But before that happens, "Hotlanta" can expect to continue to see elevated foreclosures for the next year to 18 months, and the video devotes an entire chapter to the subject.
Forsman kicks off the segment by stating that the area's foreclosure rate was the sixth highest in the country, and that there are enough vacant lots in Atlanta to supply builders for the next five years. But Atlanta didn't see rampant speculation during the boom, and has a healthy, diverse economy, he said.
Another guest presenter -- David Cook, president and CEO of Equity Depot -- tells viewers that changes in mortgage lending practices should bring foreclosures back to the normal range in 12 to 18 months.
Equity Depot is a data aggregator that tracks foreclosures. Cook says Atlanta's foreclosures have been driven by loan products that allowed buyers to purchase homes they couldn't afford, and the state's speedy, nonjudicial foreclosure process that allows lenders to repossess a home in as few as 37 days.
Of Georgia's 8,500 new foreclosures in June, 6,401 were in metro Atlanta's 13 counties, Cook said.
Forsman takes the opportunity to plug the brokerage's new foreclosure search tool, also available on its agents' Web sites, and notes that many Prudential Georgia agents specialize in foreclosures.
By the end of the video's fourth chapter, "Atlanta Foreclosures," Forsman is ready to haul out NAR's oft-ridiculed "it's a great time" to buy slogan.
"There is no doubt that it is a great time to buy in Atlanta, Georgia," Forsman says. "Whether you want a resale, a new home, or a foreclosure property, we can help. Remember that every community, and every area, is different. Your Prudential Georgia Realty agent can tell you the facts in your local area. Now let's look at the future trends for 'Hotlanta.' "
Prudential Georgia is not alone in crafting messages to draw consumers into the real estate market.
This summer, the National Association of Realtors rolled out a "Surround Sound" media campaign with state and local Realtor associations "to get the word out to consumers about the opportunities for buyers in today's housing markets."
The campaign is intended to come at consumers "from all sides of the theater" with messages "backed by statistics and solid logic to make a very plausible case for buying a home now," NAR states on a Web page dedicated to the campaign.
The Columbus, Ohio, Board of Realtors has launched a "Grass is Greener Here" media campaign that includes a dedicated Web site, ColumbusHousingFacts.com, with several videos, for example.
While many Web video producers warn that most viewers don't have the patience for pieces that run longer than a few minutes, Prudential Georgia's quarterly market reports are sliced into chapters. Along with the informational slides that run in synch alongside the video, chaptering is a "real trick" for grabbing viewers, Floyd said.
"People can cut right to whatever piece they're interested in, or come back and refresh their memory on what was said, Floyd said. "They can listen for two minutes and they have what they need."
The videos can be seen on a dedicated site, AtlantaRealEstate2008.com, and Prudential Georgia's 1,400 agents also have the ability to link to the videos on their own sites or in e-mail blasts, which most do, Floyd said.
Floyd said a competitor that was trying to interest a group of investors in buying properties in the Atlanta market even asked if it was OK to use the videos -- "We said, 'Sure.' "
"A lot of businesses around the brokerage business are using these (videos) extensively," Floyd said. "They don't have access to this kind of data. We're just trying to do our part to be the thought leader in the marketplace, and help our agents get the most accurate message out to clients and customers."
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AP: Monitoring of appraisers ineffective
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Inman News
A nationwide system set up to monitor appraisers in the wake of the savings and loan crisis did little to prevent appraisers, real estate agents and mortgage brokers from colluding to inflate home prices during the housing boom, the Associated Press said in reporting the results of a six-month investigation.
An independent federal agency authorized by Congress in 1989, the Appraisal Subcommittee, is charged with conducting field reviews and audits of appraisers. But the Appraisal Subcommittee has only four auditors and has not had a permanent director since the end of last year, AP said.
The Appraisal Subcommittee is charged with keeping records to aid state appraisal boards in identifying and disciplining rule breakers. But many state appraisal boards have failed to conduct timely investigations or resolve complaints, and federal regulators are effectively powerless over the states, AP concluded.
The Financial Institutions Reform, Recovery and Enforcement Act of 1989 recommended that states license appraisers. A private group, The Appraisal Foundation, drew up rules governing appraisers, but eight states still don't require appraisers to be licensed or certified, AP said.
The AP questioned the effectiveness of an agreement governing appraisals by lenders working with Fannie Mae and Freddie Mac that was negotiated by New York Attorney General Andrew Cuomo (see Inman News story). The agreement, which takes effect Jan. 1, duplicates regulations already in place and lacks enforcement provisions, AP said.
A bill passed by the House last year would give the Appraisal Subcommittee a consumer protection mandate, and more authority to monitor the performance of state appraisal agencies. HR 3915, Mortgage Reform and Anti-Predatory Lending Act of 2007, would penalize attempts to influence the independent judgment of an appraiser through collusion, coercion and instruction, and punish appraisers who have direct or indirect interest in a property or transaction.
The bill, which also includes controversial provisions governing mortgage originations, has been stalled in the Senate Banking Committee since it was passed by the House on Nov. 15 in a 291-127 vote. Sen. Bob Casey, D-Pa., told the AP in a follow-up story Monday that he would renew a push to move the bill forward.
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Zillow, MyNewPlace climb Web rankings
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Real estate site Zillow.com climbed from sixth place in June to third place in July and apartment search site MyNewPlace.com rose from 19th place to 16th in the latest monthly ranking of real estate Web sites released by Web metrics company Hitwise.
Brokerage company ZipRealty's Web site slid from third in June to fifth in July in the rankings, which are based on total visits to real estate category Web sites.
Move Inc.'s category-leading site Realtor.com, which is operated through an agreement with the National Association of Realtors, had a 7.3 percent market share of visits to the category in July, compared with second-place Yahoo Real Estate, at realestate.yahoo.com, which had a 3.06 percent market share.
MSN Real Estate's realestate.msn.com site fell from 15th in June to 17th in July, rental site ForRent.com dropped from 17th to 19th in the rankings, and Realtor.com's sister site, Move.com, rose from 22nd in June to 20th in July.
Curbed.com, a real estate blog site, ranked among the fastest-climbing real estate category Web sites for the four-month period ending in July, Hitwise reported. Curbed.com climbed 383 places to 94th on the list in market share for visitors to real estate category sites.
PropertyLine.com, a site focused on the marketing of commercial properties and the promotion of commercial brokerage companies, moved up 414 places to 999th in the Hitwise real estate rankings; and KCStar.2.Homescape.com, a part of Classified Ventures' Homescape.com search site, jumped 277 places to 817th.
TheMLS.com moved up 83 places to 77th; PrudentialCal.com, the Prudential California Realty site, moved up 79 places to 323rd; ColoProperty.com, a Colorado real estate search site, moved up 58 places to 212th place; brokerage site Redfin.com moved up 49 places to 48th place; My.Realtor.com moved up 33 places to 75th; real estate brokerage site Movoto.com moved up 23 places to 91st; and real estate blog network ActiveRain.com moved up 16 places to 52nd in the Hitwise rankings.
The top search terms leading to real estate category Web sites during the four-week period ended July 26 were: "Realtor.com," "remax," "zillow.com," "zillow," "real estate," "apartments," "realtor," "coldwell banker," "century 21," and "for sale by owner," in that order.
About 25.6 percent of all visits to real estate category Web sites went to the top-10 category Web sites in July, with 36.9 percent going to the top-20 Web sites and 65.5 percent going to the top-100 sites. The average visit duration for real estate category Web sites in July was 11 minutes, 28 seconds, a slight decrease from 11 minutes, 45 seconds in June.
Real estate category sties that did not appear on the top-100 list in June and joined the top-100 list in July include: my.realtor.com, themls.com, realtyusa.com, movoto.com, curbed.com, circlepix.com, realtor.org, foreclosurestore.com and realestateshows.com.
Real estate category sites that ranked among the top-100 in June but left the list in July include: realtystore.com, livingchoices.com, homefinderconnect.com, newhomesource.com, californiamoves.com, buyatimeshare.com, sibcycline.com, home-listings.org and seniorhousingnet.com.
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Canadian home sales, prices fall in July
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Editor's note: The following is a roundup of international real estate news items.
Canada's real estate market cools
A report this week from the Canadian Real Estate Association found that July home sales in Canada's major markets were down 10.9 percent from the same month last year -- 27,889 homes compared with 31,286 in July 2007. July's average home price of $327,020 fell 3.6 percent from $339,277 a year ago, a decline the association attributed to "fewer sales compared to a year ago in the four most expensive major markets -- Vancouver, Victoria, Calgary and Toronto." New listings on the market jumped 11.4 percent in the last 12 months from 46,858 to 52,214.
Year-over-year sales were strongest in Trois-Rivières (up 33.8 percent), Edmonton (up 16 percent), Quebec (up 14.8 percent), Thunder Bay (up 14.1 percent) and Winnipeg (up 12.8 percent).
Sales were weakest in Greater Vancouver (-44 percent), Regina (-35 percent), Victoria (-32 percent), Saskatoon (-17.3 percent) and Calgary (-13.1 percent).
J.D. Power ranks relocation services companies
GMAC Global Relocation Services ranked highest in customer satisfaction among employee and corporate relocation services this year, J.D. Power and Associates reported today. About one-third of survey respondents reported that they felt they had primary responsibility for managing their own relocation, or their family members had this responsibility in the relocation -- even though they were provided with corporate relocation company services. Satisfaction averaged 617 on a 1,000-point scale among these relocation services customers, while satisfaction averaged 780 for those customers "who felt that their corporate relocation company actively managed the relocation."
Some real estate brokerage companies maintain their own relocation divisions to assist relocating employees in selling a home in one market and purchasing a home in another market. GMAC was ranked 744 in customer satisfaction, followed by Prudential Relocation at 741, Crown Relocation at 725, Graebel Relocation at 712, Primacy Relocation at 704, Realogy Corp.'s Cartus at 681, and SIRVA Relocation at 653. The industry average was 708.
Relocation customers who participated in the survey ranked the five pieces of information that they want to receive from a relocation company about the city they are moving to: housing/market conditions, relative cost of living, crime statistics, school systems, and hospitals/healthcare.
About 48 percent of transferees said they had belongings that were either damaged or lost during their relocation, according to the report. The study is based on responses from 1,121 transferees who used a corporate relocation service in the past 12 months, and was conducted from April to July.
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Census: Single-family housing starts fall 39%
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Housing starts hit lowest level since January 1991
Single-family housing starts in July slipped to the lowest rate since January 1991, the U.S. Census Bureau and Department of Housing and Urban Development reported today. The seasonally adjusted annual rate of single-family starts was 641,000 in July, down about 39.2 percent compared to the same month last year. The rate of total starts, at 965,000, was down 29.6 percent year-over-year in July.
The rate of building-permit authorizations was 937,000 in July, down 32.4 percent compared to July 2007, while the rate of single-family permit authorizations was 584,000, down 41.4 percent. The rate of housing completions dropped 31.7 percent in July compared to the same month last year.
MDA DataQuick reports record price drop in San Francisco region
San Francisco Bay Area home sales increased 2.2 percent in July compared to the same month last year -- it was the first time since January 2005 that the region has seen a year-over-year increase in sales, real estate data company MDA DataQuick reported today. Sales of new and resale houses and condos in the nine-county San Francisco Bay Area region rose from 7,423 in July 2007 to 7,586 in July 2008.
Foreclosure resales had a lot to do with those sales numbers, according to DataQuick -- homes sold in July that had been foreclosed upon in the prior 12 months accounted for 33 percent of all resales, up from 29.9 percent in June and 4.2 percent in July 2007. Foreclosure resales accounted for 65.9 percent of sales in Solano County, DataQuick reported.
The median price of homes in the region hit its lowest point since March 2005, when it was $469,500, and suffered a 29.3 percent year-over-year drop in July, to $470,000. That compares to $665,000 in July 2007 and is a record in the history of DataQuick's statistics, which date back to 1988. Year-over-year price drops ranged from 41.6 percent in Contra Costa County to 6.3 percent in San Francisco.
Jumbo loans made up 32.3 percent of all home purchase loans in July, compared to 63.1 percent in the same month last year. The typical monthly mortgage payment amount for buyers in the region was $2,218 in July, down from $3,222 in July 2007.
Indianapolis most affordable major market for 12th straight quarter
Indianapolis maintained its standing as the most affordable major U.S. housing market for the 12th consecutive time in the second quarter of 2008, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) released today.Some 91.6 percent of Indianapolis homes sold in the second quarter were affordable to families earning the area's median household income of $65,100. Also near the top of the list for affordable major metros were Youngstown-Warren-Boardman, Ohio-Pa.; Detroit-Livonia-Dearborn, Mich.; Warren-Troy-Farmington Hills, Mich.; and Grand Rapids-Wyoming, Mich., in that order.
Nationwide, homes became more affordable for the third consecutive quarter, with the HOI rising to and almost matching the highest level since the second quarter of 2004.
"Today's HOI reading shows that 55 percent of all new and existing homes that were sold during the second quarter were affordable to families earning the national median income of $61,500," said NAHB President Sandy Dunn, a builder from Point Pleasant, W.Va. "Several factors combined to increase housing affordability nationwide. There was a marginal rise in mortgage rates, which still remain near the historically low levels of a few years ago, family income nationwide held steady and lower house prices."
One smaller metro market (fewer than 500,000 people) outranked all others in terms of housing affordability during the second quarter: Canton-Massillon, Ohio, where 96.7 percent of all homes sold in the period were affordable to families earning that area's median household income of $54,600.
New York-White Plains-Wayne, N.Y.-N.J., was the nation's least affordable major housing market, with just 11.4 percent of new and existing homes sold during the second quarter affordable to those earning the area's median family income of $63,000.
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Traditional vs. discount: 'You get what you pay for'
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Inman News
Editor's note: The following is a collection of reader's comments found on Inman.com:
'You get what you pay for'
Help-U-Sell franchiser files for bankruptcy
"I feel there is room in our industry for both traditional/full-service and discount/limited-service brokerage. What I do not like to see is the discount model advertising that they are also full-service versus limited-service. The public needs to be educated on what a true full-service brokerage does: from listing to close and beyond. Therein lies the difference, and let the consumer decide.
"In my business, I have chosen to align myself with a full-service, very traditional brokerage for the full menu of services I can offer my clients. And for that privilege, I pay a considerable portion of my commission to my brokerage and this is in turn paid through the commission I charge my clients. As in everything in life, 'You get what you pay for.'
"In a hot market, yes -- many times homes may find a buyer quickly, but you still need the agent's expertise in negotiation and other necessary skills to shepherd the transaction to closing. In a not-so-hot market, you may need the added exposure that a full-service provider can bring to the table. Many of the local limited-service or discount brokerages make up their profits through the sheer volume of listings -- which must dilute the services available to each client during the transaction process.
"Having dealt with many of these brokerages in the past, some have gone well but the majority involved much more work on my part due to having to resolve issues that typically should have been handled by the cooperating (listing) agent but ... there was nobody there to handle what needed to be done. I can't really blame them as they are only doing the services the seller is paying for but it does put the buyer's agent in an unfair and often uncomfortable position of walking the line between being helpful and undisclosed dual agency.
"As long as sellers are fully aware of what they are buying when they agree to a limited-service provider and that listing agent is handling the critical portions of the transaction (acceptance of offers, all negotiations, attending inspections personally, going to the closings, etc. -- which I view as the very least a seller should expect from their agent) then I have no personal problem with cooperating with such an agency.
"Again, advertise exactly what you will do for your fee and then let the consumer decide what level of service they wish to employ."
--Christi Borden
We are here to serve
Something to chat about
"Just being available and willing to find the answers -- even if I might not know all of them -- will put me a step above much of the competition. I recently had to be reminded and remind myself that I'm not just in the business to help people buy and sell houses, but I'm also in a customer-service industry. We are here to 'serve,' no matter how cutthroat the business might seem. Though it might seem like 'there are a lot of other Realtors in the business,' it truly is a small world. Besides, 'that which you give, so shall you receive.' Life overall is so much nicer to me when I treat others how I would like to be treated."
--Stephen Adams
Zero in on the market's strengths
Play to your strengths in slow market
"I think it is also important to play to the MARKET'S strength as well as your own.
"For example, the current market is creating a lot of investing opportunities for us agents -- outside of regular listing and selling. Some of the 'market strengths' right now are great terms, rent increases and low prices.
"If we adjust our focus just a bit to zero in on the market's strengths (as well as our own), we'll be in an even better place."
--Mike Watson
Online and offline marketing should not be separate
'Big head,' print ads survive in mountains
"Online and offline marketing are not separate and apart from each other. A cohesive marketing strategy should include both. As Matt (Fagioli) points out, print media can drive consumers to your Web site ... along with many other avenues of promotion which are greatly underutilized. How many agents think to put their Web site address in their outgoing voicemail message? Few.
"As for drawing a causal relationship between successful agents and print advertising, doesn't it stand to reason that there are probably other factors contributing to their success? Perhaps they consistently and effectively prospect on a daily basis, work their sphere of influence regularly, attend local business and networking events, stay involved in community activities, maintain a good relationship with other Realtors, and write personal notes every day. None of which is visible to the rest of us. I'm a bit skeptical that mailers and print ads are the driving force behind successful agents. I think perhaps hardworking agents are still doing print advertising."
--Catherine Read
Information compiled by Daniel Rothamel, Inman Community Manager
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The dog days of real estate
Alison Rogers
Inman News
So the dog -- a fairly big black Lab -- threw up in the lobby five minutes before the potential buyers were supposed to show up. I swear I was nice about it. "I'm a real estate agent and I've got someone coming to see the apartment," I said to the dog's walker, a girl of about 16 who looked like she'd never seen dog vomit before.
"Do you mind if I just fold the rug over a little bit before they come in?" I asked, adding, "I don't think it'll make it harder to clean up."
The response I got five minutes later from an older woman who came down with a roll of paper towels: "I don't appreciate you being rude to my granddaughter!"
I couldn't even figure out what got marked as rude -- not saying "please" before I folded the rug? Not offering to take off my Hermes scarf and lay it in the puddle of muck? Not petting the dog and pretending the whole thing hadn't happened?
"I'm sorry, I didn't intend to be rude," I said to the older lady, thinking since I was in the, um, doghouse, anyway I really wished I'd let loose on the kid with a "look-what-your-darned-mutt-did-now" tirade. "I'm a real estate agent ..."
"Well, so am I," she snapped.
"And I've got clients coming," I added, trying to smile and figure out what the heck I had actually done. I decided that the 16-year-old had gotten manipulative and blamed the mean scarf lady in the lobby to get out of cleaning up (which worked, since her grandma did it -- I don't remember that my grandma Lillian, God rest her soul, would have fallen for such a trick).
The clients came, and they were fairly nice, though it was tough to read how much they were put off by the smelly entrance and how much they liked the apartment. I need to point out that, for about a week, the weather has been weird in a global-warming sort of way. Today's freakishness was that we got a pelting thunderstorm one minute after the potential buyers stepped in. As a result, I think they were more worried about whether they were going to be trapped in the loft that I was showing than about how gorgeously high-ceilinged it was. Not that I didn't tell them about the chef's kitchen and the four different HVAC zones -- I just don't think that they were listening.
It was just, in many ways, that kind of sultry, annoying week. I got a hot referral (thank you for that) but nothing is going to happen on it for awhile, as the client must find someone to tear out the shag carpet. Lots of appointments got cancelled at the last minute, leaving me stranded in the office for hours when I would rather have been home or at least getting a haircut, since in this humidity I look like one of the Monkees. My one really immediate prospect for the week, a renter whose lease is up Aug. 31, ended up traveling a lot for work, so some things I wanted to show her got rented when she was in Los Angeles. Then I rearranged my schedule to stay late in the office and see something else with her, and her company sent her to Pittsburgh.
I'll spare you the question of whether I'm handling my weekends correctly -- that's a whole other column. Right now, I'm just trying to trudge through the swampy weeks till Labor Day, when maybe market psychology and everyone's temper -- mine included -- will get a little better. Though I swear I'm being nice about it, some days the sun comes out like you're in a Windex commercial, and some days it just doesn't. In the grand scheme of things, that's small stuff. All you can do is hope that the customers don't notice.
Alison Rogers is a licensed salesperson and author of "Diary of a Real Estate Rookie."
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TurnHere partners with WellcomeMat
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Online video companies expand real estate offerings
TurnHere Inc., an online video solutions platform, today announced a partnership to become a trusted video production partner for WellcomeMat, an online video management platform where site members market properties and local businesses. As part of the initial relationship, TurnHere will provide at least 250 local neighborhood videos for WellcomeMat's new video search product.
Through the agreement, WellcomeMat will gain a video production partner with wide local reach, a proven style and extensive experience in the real estate and small- and medium-size business (SMB) verticals. In addition, TurnHere will be represented in WellcomeMat's filmmaker directory, providing the company with access to prospective clients seeking videos for their local business or real estate listing. WellcomeMat will also display TurnHere video content on its search pages, directing prospective customers to TurnHere's WellcomeMat profile page where visitors can hire a filmmaker, request a quote or contact TurnHere directly. Through the partnership, WellcomeMat will more than double the number of local video producers available through their proprietary platform.
TurnHere's founder and CEO Bradley Inman is also the founder of Inman News.
Estately users can share home searches
Estately.com, a real estate search and brokerage company that works on a referral basis by connecting consumers with real estate professionals, has announced the launch of online tools that allow home shoppers' friends and family to join in a home search. Consumers who use the search site can share their notes on homes for sale and view properties and feedback shared by their friends and family members. Users also have the option to make their personal "My Estately" search information public and to invite others to view their saved homes and notes at a unique URL (see a sample here).
Roost adds four states to property-search service
Roost, a real estate search engine, on Thursday announced the launch of its service in the New England area, extending its coverage to New Hampshire, Vermont, western Maine and northern Massachusetts. The company's network now includes more than 6,000 U.S. cities and market areas. Roost.com offers information on resale, new construction and for-sale-by-owner properties.
Roost also offers property listings information for homes in Atlanta, Austin, Baltimore, Boise, Boston, Chicago, Dallas, Denver, Fort Worth, Houston, Las Vegas, Miami, Minneapolis, Nashville, Orange County (Calif.), Orlando, Philadelphia, Phoenix, Portland, Sacramento, San Diego, St. Paul, Tampa, California's Silicon Valley, St. Louis and Washington, D.C., among other market areas.
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First American: Inflation hurts home prices
Inman News
Inman News
Year-over-year declines in national home prices have stabilized in the 10 to 11 percent range, but price declines are accelerating when inflation is taken into account, according to a new analysis by First American CoreLogic.
The First American CoreLogic June 2008 LoanPerformance House Price Index shows home prices down 10.7 percent in June from a year ago. The index concludes that between April and June home-price declines were flat, falling by an average of 10.8 percent. But factor in inflation and real home-price declines accelerated from 15.3 percent in April to 16.8 percent in June.
"Given the surge in inflation, real inflation-adjusted home prices are still declining at a faster rate," said Mark Fleming, chief economist for First American CoreLogic, in a press release.
Fleming said even without factoring in inflation, 37 states are seeing nominal price declines, with prices down more than 20 percent year-over-year in California and Nevada, and more than 17 percent in Arizona and Florida.
Based on home-price expectations for the remainder of the year, Fleming predicts there will be 2.7 million pre-foreclosure and foreclosure filings in 2008, up nearly 50 percent from a year ago.
The 11 markets with the biggest price drops were located in California, Florida, Nevada and Arizona.
They were:
- Los Angeles-Long Beach-Glendale, Calif., -26.55 percent
- Riverside-San Bernardino-Ontario Calif., -26.07 percent
- Oakland-Fremont-Hayward, Calif., -25.67 percent
- Miami-Miami Beach-Kendall, Fla., -24 percent
- Las Vegas-Paradise, Nev., -23.52 percent
- Cape Coral-Fort Myers, Fla., -22.17 percent
- San Diego-Carlsbad-San Marcos, Calif., -22.09 percent
- Phoenix-Mesa-Scottsdale, Ariz., -21.14 percent
- Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla., -20.06 percent
- Orlando-Kissimmee, Fla., -19.15 percent
- Tampa-St. Petersburg-Clearwater, Fla., -15.34 percent
Four out of the five top markets that saw prices appreciate were in Texas: Austin-Round Rock (up 4.02 percent), Houston-Sugar Land Baytown (3.55 percent), San Antonio (2.12 percent) and Dallas-Plano-Irving (1.56 percent). Salt Lake City, Utah, also saw 2.27 percent appreciation in June from the year before.
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Buyers flock to FHA, government-backed loans
Inman News
Inman News
Borrowers are flocking to government-insured loans, particularly those offered by the Federal Housing Administration, as they seek to refinance out of costly adjustable-rate mortgages or take out purchase loans with low down payments.
The Mortgage Bankers Association says applications for government-insured loans were up 133.9 percent in July from a year ago, while applications for conventional loans like those purchased and guaranteed by Fannie Mae and Freddie Mac fell 50.2 percent.
Ginnie Mae, which securitizes FHA loans, is surpassing Fannie and Freddie in issuance of securities backed by fixed-rate mortgages during August, the blog HousingWire.com reported, citing data from eMBS Inc.
FHA loans typically have lower down payments than those offered by Fannie Mae and Freddie Mac, the MBA noted, with a 97 percent maximum loan-to-value (LTV) ratio for FHA loans compared with 95 percent for Fannie and Freddie. Conventional loans also tend to have higher credit score requirements than FHA loans.
In addition, Congress and the Bush administration have expanded FHA loan guarantee programs by raising loan limits and creating new products that allow borrowers who are behind on their existing mortgage refinance into more affordable loans.
The share of loans guaranteed by government programs such as FHA and VA has been increasing since February 2007, but that growth has accelerated this year, the MBA said. Applications for government-insured loans, which hit a low in August 2005 with a market share of 5.8 percent, accounted for 29.1 percent of mortgage applications in July, compared with 8.4 percent a year ago and 9.4 percent in January.
The level of conventional to FHA refinance applications was up 317 percent in July from a year ago, and most of that business is likely to be borrowers refinancing out of subprime ARMs, the MBA said. The number of loans guaranteed rose more modestly -- 261 percent -- because not all applications are approved.
"The higher application and endorsement activity for government-insured loans highlights the need for FHA modernization," the MBA said of recently approved legislation that's intended to make the FHA approval process more streamlined and efficient.
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Sales rise, prices tumble in Southern California
Inman News
Inman News
Foreclosure resales are a 'dominant factor' in Southern California market
Southern California sales hit the highest level in over a year, real estate research company DataQuick reported today, with sales up 13.8 percent year-over-year in July. The July sales count -- 20,329 new and resale homes and condos sold in the six-county Southern California area -- was the highest since March 2007, when 21,856 homes were sold. But the count was still 23 percent below average July sales since 1988, the first year of DataQuick statistics for the region. The median price for the region dropped 31.1 percent year-over-year in July, falling from $505,000 to $348,000.
"Foreclosure resales continue to be a dominant factor in today's Southern California market," and accounted for 43.6 percent of all resales in July, up from 7.9 percent for the same month last year, DataQuick reported.
Builders' monthly confidence index unchanged in August
While components of a monthly index that measures builder confidence improved slightly in August, the overall index held at a low level. The National Association of Home Builders/Wells Fargo Housing Market Index, which is based on a survey of builders about current and future market conditions and the traffic of prospective buyers, held at a rating of 16 in August -- a score below 50 represents a market in which more builders view market conditions as "poor," than those who view them as "fair" or "good."
An index component that measures current sales rose one point to 16, the component gauging sales expectations for the next six months rose from 23 to 25, and the component that gauges traffic of prospective buyers held at 12. Regionally, the index for the West declined three points to 11, the South held at 20, the Midwest rose four points to 14 and the Northeast rose two points to 16.
REO property manager on hiring spree
Business is booming for Mortgage Contracting Services, a company that inspects and maintains real-estate-owned properties around the nation through a network of subcontractors.
Tampa, Fla.-based MCS says it's hired 92 new employees in 2008, doubled its office space, and moved its corporate headquarters to the Bank of America tower. MCS said it's grown its client base and broadened services to include additional REO activity and asset disposition services.
MCS provides property inspections, property preservation, REO maintenance, hazard claims administration and default management, with offices in Tampa, Cincinnati, Dallas, Des Moines, Iowa and Austin, Texas.
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Video killed the business card
Bernice Ross
Inman News
One of the most important trends over the next few years will be the "videoization" of the Web. Agents and brokers are already incorporating video into their Web sites. They are broadcasting their virtual tours on places like YouTube, Google Video and Yahoo Video. Here is a list of 10 smart ways to incorporate video in your business:
1. Live like a local
Professionally produce a video about the specific geographical area(s) that you serve. In the video, act as a tour guide showing what makes your area unique. Avoid doing an infomercial about you. Your goal is to give viewers a sense of the local lifestyle.
2. Video testimonials
This is one of the most important uses for video. Video testimonials increase your credibility. More importantly, they are an extremely powerful risk-management tool. If you are ever involved in litigation, there's nothing better than having the person who is suing you saying how wonderful you were in handling their transaction.
3. Save gas with video caravans
For years, agents have jumped in their cars every week to view their company's new listings. A great alternative is to have each listing agent take a video of their new listings and then put them into a "show" for the office meeting.
4. Preview neighborhoods and houses for relocation clients
One of the most time-intensive activities in the real estate business is driving relocation buyers around to help them become acquainted with various neighborhoods. You can greatly reduce this process by taking videos of the various areas where they are looking. Video the traffic at rush hour as well as what it's like on a weekend morning or afternoon. You can also video the inside of the houses that they would like to see (provided you have the seller's permission). Post the video on a passcode-protected part of your site.
5. Go mobile
In the very near future, our mobile phones will be our connection point for virtually everything that we do. You'll watch your favorite TV shows, receive video messages from vendors about specials as you walk past their stores, and experience a wide array of other applications. To take advantage of this trend, obtain a "dot-mobi" address in addition to your "dot-com" address. On your dot-mobi site, provide a series of links to your listing videos plus any other high-interest videos about local restaurants, theaters or other recreational activities.
6. Get a jump on the competition
Whether you're at an open house or are previewing properties for clients, if you find a terrific piece of property, make a quick video using your PDA or iPhone and send it to your clients. If the property is one where there may be multiple offers, you greatly increase the odds that your clients will be first in line with their offer.
7. Architectural tour
Most areas have historical homes as well as certain architectural styles that are unique to the area. Make a video of five to 10 of the best examples of the various architectural styles that are prevalent in your area. You could also conduct your own guided tour of the major historical homes as well. If you are in a resort area, use video to show the different types of second homes or vacation rentals as well as nearby amenities.
8. Before-and-after staging videos
One of the most important steps that you can take to sell any property is to stage it properly. Sometimes sellers are reluctant to do this. Showing them a video of past properties that were staged and successfully sold can motivate them to take this important step.
9. Inspection videos
At Real Estate Connect, Kelly Roark of FrontDoor.com suggested that you video the home inspection. Rather than having to rely on a verbal description of a particular problem, having it on video is much smarter. You can also use video to illustrate how to operate the appliances, sprinklers, air conditioning, and other systems as well.
10. Syndicate and/or distribute your videos
Once you shoot a video, use TubeMogul.com to syndicate your video to YouTube, Google Video and Yahoo Video, plus 12 other video sites, all at no charge.
As our current bandwidth continues to expand, video will become increasingly important in both our personal and our business communication. Static pictures and text messaging will no longer be satisfactory to the next generation of Web users. Instead, they will expect a full range of video applications that create the experience of "being there." In fact, we already have the technology to create three dimensional virtual tours. Once the bandwidth is in place, it may not be long before we are doing our showings from our mobile phones and a set of 3-D goggles. Now that would be a true revolution in how we conduct our business.
Bernice Ross, national speaker and CEO of Realestatecoach.com, is the author of "Waging War on Real Estate's Discounters" and "Who's the Best Person to Sell My House?" Both are available online. She can be reached at bernice@realestatecoach.com or visit her blog at LuxuryClues.com.
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Realogy: Market 'difficult to predict'
Inman News
Inman News
Real estate brokerage and franchise company Realogy has consolidated about 70 company-owned offices this year and most of its consolidations have concluded, the company announced during an earnings call on Thursday.
Those consolidations are expected to reduce operating costs by $15 million on an annualized basis, the company reported.
Richard Smith, company president and CEO, also said during the second-quarter earnings call that the housing market "has proven exceedingly difficult to predict," and this month markets the 37th consecutive month "in which our industry and our business have been under considerable downward pressure."
The company had a net loss of $27 million in the second quarter, with company-owned offices reporting an 8 percent year-over-year decline in the average home prices in the second quarter and franchisees reporting an 8 percent year-over-year decline during the quarter.
Home prices, said Smith, "continue to be negatively impacted by high inventory levels, foreclosures, a challenging financing environment at the higher home-price levels and other market pressures. The uncertainty about price declines seems to be driving the headlines and that has definitely had an affect on consumer confidence as well."
He also said, "Clearly, the timing of a housing recovery remains the greatest variable and challenge facing the industry today."
The company reported signs of improvement in its company-owned operations in Florida, with unit sales up 1 percent for the three-month period ended June 30 compared to the same period last year. Hard-hit markets in California, too, are showing sins of improvement, Smith reported, with unit sales up 9 percent in San Diego and 29 percent in Sacramento year-over-year in the second quarter.
"Most of this unit sale increase is from increased foreclosed home sales activity," the company reported, with the average sales price in falling 21 percent year-over-year in San Diego and 30 percent year-over-year in Sacramento in the second quarter.
Other markets showing signs of improvement for Realogy's company-owned offices include Dallas, San Francisco, Minneapolis and Washington, D.C., according to the earnings announcement.
In New York City, the company's Corcoran operations have fallen from record levels in second-quarter 2007 but the "super-luxury market," which the company defines as sales above $10 million, "remains resilient."
The company reports "impact from the sagging financial services sector" at the lower-end of the housing market in Manhattan, Connecticut, Westchester and New Jersey. "The Hamptons is also showing weakness, although the rental market over the summer remains buoyant," Smith stated.
Arizona, Utah and Atlanta are among the "most-challenged markets" for Realogy's company-owned operations, as well as Baltimore and Boston, "which both performed fairly well for most of 2008 but in the last two months have weakened considerably."
Among the company's franchise operations, the Western region franchisees recorded the best performance in the second quarter with sales unit declines of 16 percent – California had sales unit increases of 2 percent but price declines of about 19 percent, the company reported.
Washington state, meanwhile, had declines in unit sales of about 35 percent in the quarter and price declines of 8 percent, while the Northeast region had sales volume declines of 28 percent and New York, New Jersey and Pennsylvania had volume declines from 27 percent to 30 percent.
Realogy added $1.1 billion worth of gross commission income in the past 12 months through new franchise sales and renewals, compare to $288 million in gross commission income that was either terminated by the company or not renewed by the broker.
The average broker commission rate was 2.52 percent within Realogy's franchise group in the second quarter, which represents a slight rise compared to the same quarter last year, and the average broker commission rate for company-owned offices held at 2.48 percent year-over-year in the second quarter.
Smith reported that commissions could improve if the average home price continues to fall. "We believe higher commission rates are a function of lower average sales price. And to the extent that average price continues to fall, we would expect the average broker commission rate to remain steady or slightly improve."
A team created by Realogy to "identify and assist brokers who have been adversely affected by the housing downturn" at franchise offices has retained about $108 million in gross commission income across the company's brands since the team launched in mid-2007, according to the report, though a combination of mergers, acquisitions and other strategies.
Smith reported that the "U.S. government's direct involvement" in attempting to shore up the damage from the credit crunch should have a positive impact on the housing market.
"We believe there are very early signs of a developing bottom. The issue, of course, is exactly when. We do think it is sooner rather than later, but of course we can't know for certain," Smith said during the conference call.
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P3 offers neighborhood videos to brokers
Matt Carter
Inman News
Real estate brokerages in the Chicago area are flocking to a service that puts their branding on a widescreen video player that streams slick shorts about different facets of the city's neighborhoods, from restaurants and nightlife to parks, schools and hospitals.
A basic version of the video player, Chicago Neighborhood Explorer, is available for free, but most Realtors are choosing to pay for a premium level of service that allows them to custom brand the player and add property videos and listings, said Peter Braun, founder and president of P3 New Media Group LLC.
By contracting with advertisers who want to reach local consumers, P3 has built a library of free neighborhood videos from 5,000 hours of high-definition (HD) footage the company has shot in the Chicago area, Braun said.
P3 is able to make the basic Web video player available free, because the company's ad-based model depends on putting the videos in front of many eyeballs.
"Realtors are on limited budgets -- times are hard," Braun said. "We think ad-supported content that is syndicated is a successful model."
Some marketing experts say consumers are turned off by ads when they are embedded at the beginning of a video, or don't watch them when they're appended to the end. The Chicago Neighborhood Explorer video player addresses the issue by placing small, unobtrusive display ads around the basic player's screen, which serves up more detailed information from advertisers only when the ads are clicked.
"These are Flash micro sites, and since they are in Flash, they (advertisers) can do anything they want with them," Braun said, including video. Flash is a type of software that is used to add multimedia content and interactive features to Web sites.
A subscription-based premium service that starts at $59 a month provides a custom-branded video player with access to P3's library of shorts, plus the ability to stream agent profiles and property tour videos. The company offers to produce videos for $500 to $5,000 depending on the customer's requirements.
Although the Chicago Neighborhood Explorer is not targeted exclusively at Realtors -- chambers of commerce and sites that cater to apartment hunters and tourists are other likely adopters -- a number of Chicago-area brokerages have already created branded players. The brokerages include brands like Coldwell Banker, Keller Williams, Century 21, Prudential, RE/MAX, Sotheby's and GMAC Real Estate.
It's a model that the company can expand into any market, Braun said, although there's considerable legwork involved in signing up advertising sponsors and shooting and producing the videos. Getting off the ground in Chicago has been a big project, and while the company has its eyes on other markets, Braun wouldn't say where the company might go next.
"The top 25 MSAs (metropolitan statistical areas) are in our sights," Braun said.
In addition to building a library of videos, there's also the technical challenge of getting them to stream in real time. P3 New Media Group relies on Akamai servers to ensure smooth delivery.
The videos the company has shot in Chicago are noticeably brighter and crisper than typical Internet video, and make good use of HD's wider 16:9 aspect ratio. Some minor visual "artifacts" from compressing the huge HD files for Web streaming are sometimes apparent, especially when the camera is panning or zooming.
The videos are compressed to a standard below true HD for smooth streaming over the Internet, Braun said, but P3 can also provide clients with hard copies of full-sized HD files for presentations in settings like open houses.
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'Jumbo conforming' rates could come down
Inman News
Inman News
Changes in the rules for selling jumbo mortgages to secondary market investors could mean lower interest rates for home buyers seeking loans that fall within the new $625,550 limit for purchase or guarantee by Fannie Mae and Freddie Mac in high-cost housing markets that takes effect Jan. 1.
The Securities Industry and Financial Markets Association says it will allow Fannie, Freddie and Ginnie Mae to mix a limited number of the "jumbo conforming" loans -- no more than 10 percent -- in pools of conforming loans sold to secondary market investors for "To-Be-Announced" delivery. The TBA market is considered the most important secondary market for mortgages because bonds are traded even before the specific loans that back them are actually identified.
"We expect higher balance borrowers to receive both rate relief and increased liquidity as was desired in the legislation, while retaining the overall liquidity of the TBA market," SIFMA managing director Sean Davy said in a statement. The new arrangement "preserves the overall homogeneity of the market while at the same time minimizing the risk of a negative impact on mortgage rates for lower-balance-loan borrowers, or, potentially, all borrowers."
When Congress and the Bush administration in February granted Fannie and Freddie temporary authority to purchase loans of up to $729,750 as part of the economic stimulus bill, SIFMA ruled that the larger loans could not be mixed into the same pools with mortgages that fell within the $417,000 conforming loan limit. The industry association was concerned that investors would have difficulty valuing pools of mixed jumbo and conforming loans, and that interest rates on conforming loans might go up because of worries about the performance of the larger loans (see story).
With the temporary $729,750 limit expiring at the end of the year, SIFMA is ready to allow some mixing and matching of conforming mortgages with loans up to the new $625,550 limit for high-cost areas established by the sweeping housing bill signed into law at the end of July, HR 3221 (see story).
Despite the higher limits, Fannie and Freddie haven't played a big role in the jumbo loan market, and analysts at Barclays Capital estimate that only 15 percent of jumbo loan borrowers will qualify under the new $625,550 loan limit, Reuters reported.
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