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Author: Greg Swann (page 87 of 209)

Suburban Phoenix Real Estate Broker

October 20, 2008

No layoffs at Trulia: The San Francisco treat is still hiring

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CNET:

Real-estate sites had some tough times last week. First, Redfin, an online brokerage for residential real estate, announced that it was laying off 20 percent of its staff, then Zillow, a service that delivers home values and lists sales, announced that it was forced to lay off 25 percent of its workforce.

But Trulia, which lets buyers find homes for sale across the United States, says it has no layoff plans and that it has enjoyed so much growth, it’s actually looking to expand.

“We are not making any layoffs. All companies need to be smart in this environment and adjust to the market movements,” Pete Flint, CEO and co-founder of Trulia, said in an interview. “As a company, we are in a strong position. We always believed that we had to be aggressive but fiscally responsible, and that is why we are in the position we are (in) today. In fact, we are still making a few select hires, where they are important to our revenue growth.”

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October 18, 2008

Tom Johnson to the Realty.bots: All that free stuff you gave us would have been a bargain at twice the price!

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In a comment at the Future of Real Estate Marketing, our friend Tom Johnson delivers a fatherly lecture on the facts of life:

This is the free market and unintended consequences at work. There is a reason that the commission rates have been stuck for years where they are. The contingency nature of the listing relationship drives the business. The consumer is unwilling to pay for service that does not result in a sale.

Pouring VC cash into the real estate space has improved technology. The RE.net came on the scene with plans to disintermediate the real estate brokers by tapping into the commission honey pot. This put pressure on commissions forcing brokers to cut costs, so the RE.net responded by giving the services away for free. Free outbound doesn’t earn a return inbound. The cash burn continues, brokers continue to cut costs by not buying RE.net products causing more cash burn and layoffs.

As transactions slow, the commission honeypot shrinks. Brokers will cut cost and redouble efforts to get salable listings, by using the free tools that are provided by RE.net.

It seems to me that the RE.net did indeed disintermediate, but it was not the RE brokers that were disintermediated, but the print media. So here we are, marketing listings for free on the web. Because of the fractured nature of the RE space, it takes unimaginable amounts of time to manage all that free stuff, so we are where we were. The consumer is still unwilling to pay cash for RE services on a non-contingency basis. So, we tweet and blog and facespace our listings, to get a transaction started, and then the real work begins-getting the contract to the closing table. That is the part of this industry that the RE.net sort of forgot about and the cash burn continues…

Indeed. We have seen the future of real estate marketing — and it is us.*

As might be obvious, I don’t have a lot of time for other RE.net sites right now, but it is worthwhile to note that tFoREM has four whole posts this week, a huge number by comparison to recent Read more

October 18, 2008

This just might be the optimal time to buy a home in Phoenix

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This is my column for this week from the Arizona Republic (permanent link).

 
This just might be the optimal time to buy a home in Phoenix

Who should be buying residential real estate in Phoenix right now?

If you have been planning to buy a home sometime soon, and if you know for certain that you won’t need to sell it for at least five years, this just might be your magic moment.

Interest rates are still deliciously low, but both current events and long term trends suggest they’re headed higher. You’ll probably have to sell your current home for less than you wanted to, but you’ll be buying your next home at a bargain-basement price.

Sadly, you may not have enough equity in your home to move up. But if you do, there are some amazing homes out there selling for unheard-of prices. Houses that sold for $375,000 in 2005 are going for $175,000 three years later.

If you do have substantial equity in your home, even at today’s prices, moving up now may make a lot of sense. The rules for the capital gains exclusion on primary homes change on January 1st. If you’ve been in your home for more than the last 24 months but fewer than the last 60 months, moving before the end of the year could save you a significant amount of money on your taxes.

It makes sense to me for college students and their parents to snap up condominiums and starter-homes while prices are so low. After the start of the year, if the student holds title, it will take five years to realize the full benefit of the capital gains exclusion — approximately the length of a college career.

First-time home-buyers are taking advantage of this market, as well, with low-down-payment or even nothing-down government-sponsored loans.

Who else should be buying? Investors, of course, but the smart ones have already figured that out. For now, it’s very easy to acquire a premium home in a commuter-friendly suburb that will be cash-flow positive from the first tenant. Investor loans can be hard to obtain, but prices are so low that many investors Read more

October 18, 2008

Mark Steyn writes about Joe the Plumber — while it’s still legal

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Looking forward to the day when he won’t have to go to Canada to be persecuted for being an insanely great writer, Mark Steyn takes on the Joe the Plumber investigation:

Joe the Plumber expressed his misgivings about the President-in-waiting’s tax inclinations, and the O-Man smoothly reassured him: “It’s not that I want to punish your success,” he told the bloated plutocrat corporate toilet executive. “I just want to make sure that everybody who is behind you, that they’ve got a chance for success too. I think when you spread the wealth around, it’s good for everybody.”

In that sentence about you spreading the wealth around, there’s another typing error: that “you” should read “I, Barack.” “You” will have no say in it. Joe the Plumber might think he himself can spread it around just fine, but everyone knows “trickle-down economics” don’t work. So President-presumptive Obama kindly explained the new exquisitely condescending “talking-down economics:” Put that in your pipe and solder it.

Evidently the O-Mighty One was not happy after his encounter with Joe. He’s still willing to talk to Ahmadinejad without preconditions. But never again will he talk to Joe the Plumber without preconditions. Outraged at the way the right-wing whackos were talking up Joe the Plumber as if he were an authentic regular Joe like Joe Biden, the O-Bots of the media swung into action. Vast regiments of investigate reporters were redeployed from the Wasilla Holiday Inn back to the Lower 48.

“We need you down here checking out this Joe the Plumber,” editors barked to journalists.

“But I’m this close to wrapping up the Wasilla Town Library banned-book investigation!”

“Forget it! The Atlantic Monthly is claiming Joe the Plumber is Trig’s real father. We can’t get behind on this. Get to Minneapolis Airport. Joe the Plumber was seen in the bathroom with Senator Larry Craig.”

“Yes, but he was installing a stopcock…”

“Look, you went to Columbia School of Journalism. This is what we bold courageous journalists do. We’re the conscience of the nation. We speak truth to plumber.”

“Er, shouldn’t that be ‘Speak truth to power’?”

“That’s the old edition of the handbook. Now we speak truth Read more

October 16, 2008

To Condi, with sweetness

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[I wrote this essay six years ago. I knew even then that Rice wouldn’t run for president — she’s much too smart for that. Too bad, though. She would have been a great president, a great argument for everything America can be. I don’t see this promise in Barack Obama — much the contrary — and I hope to Christ I’m wrong. Nota bene: Many of the links will be broken by now. –GSS]

 
The Los Angeles Times has an article (registration required, alas) speculating on the prospects for a 2008 presidential match-up between Hillary Clinton and Condoleezza Rice.

It’s not a brand-new idea. I first heard of it from Andrew Sullivan. And the Times article is following-up on, without mentioning, a recent public address by William Safire.

I am in love with this idea, and not just because I have publicly and repeatedly declared my enmity for all things Clinton. I would love to see Hillary Clinton get trounced at the polls by Condi Rice, but, truly, I would love to see Hillary get trounced at the polls by just about anyone.

And I’m not changing my spots to become a Republicrat this late in the game. Everything I’ve heard about Rice suggests that she is the least objectionable sort of mainstream politician — pro free-trade, pro second amendment, anti big government. And like that other bright light of black conservatism, Justice Clarence Thomas, she seems to be driven by firmly-held principles, not will-o’-the-wisp polling results. But it remains that she is a mainstream politician, a decidedly small-L libertarian.

Nevertheless I want her to run and I want her to win. I want what she stands for to win.

And by “stands for”, I mean what she stands for as a symbol. This is completely unfair to her, I confess. It was unfair to Justice Thomas, too. And as much as I regret what was done to him for all the things he stands for, both in his principles and as a symbol, nevertheless I am glad that he was stout enough of heart and spirit to withstand his torment. He conferred upon America a gift Read more

October 16, 2008

Peter Schiff: “Our leaders irrationally promoted home-buying, discouraged savings, and recklessly encouraged borrowing and lending, which together undermined our markets”

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Peter Schiff in the Washington Post:

Amid the chaos of recent days, as the federal government has taken gargantuan steps to stabilize the financial markets, realigning the U.S. economic system in the process, comes a nearly universal consensus: This crisis resulted from government reluctance to regulate the unbridled greed of Wall Street. Many economists and market participants who were formerly averse to government interference agree that a more robust regulatory framework must be constructed to cage the destructive forces of capitalism.

For the political left, which has long championed the need for such limits, this crisis is the opportunity of a lifetime.

Absent from such conclusions is the central role the government played in creating the crisis. Yes, many Wall Street leaders were irresponsible, and they should pay. But they were playing the distorted hand dealt them by government policies. Our leaders irrationally promoted home-buying, discouraged savings, and recklessly encouraged borrowing and lending, which together undermined our markets.

Just as prices in a free market are set by supply and demand, financial and real estate markets are governed by the opposing tension between greed and fear. Everyone wants to make money, but everyone is also afraid of losing what he has. Although few would ascribe their desire for prosperity to greed, it is simply a rose by another name. Greed is the elemental motivation for the economic risk-taking and hard work that are essential to a vibrant economy.

But over the past generation, government has removed the necessary counterbalance of fear from the equation. Policies enacted by the Federal Reserve, the Federal Housing Administration, Fannie Mae and Freddie Mac (which were always government entities in disguise), and others created advantages for home-buying and selling and removed disincentives for lending and borrowing. The result was a credit and real estate bubble that could only grow — until it could grow no more.

Prominent among these wrongheaded advantages are the mortgage interest tax deduction and the exemption of real estate capital gains from taxable income. These policies create unnatural demand for home purchases and a (tax-free) incentive to speculate in real estate.

Similarly, the FHA, Fannie and Freddie were created Read more

October 15, 2008

The soul of wit: Boiling Obama down to his essence

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This is Melanie Phillips in the Spectator:

You have to pinch yourself – a Marxisant radical who all his life has been mentored by, sat at the feet of, worshipped with, befriended, endorsed the philosophy of, funded and been in turn funded, politically promoted and supported by a nexus comprising black power anti-white racists, Jew-haters, revolutionary Marxists, unrepentant former terrorists and Chicago mobsters, is on the verge of becoming President of the United States. And apparently it’s considered impolite to say so.

Now that’s good writing, just blistering concision. It’s 76 words, and I’ll bet she could recite it with passion in less than 30 seconds. It would be sweet if a 529 group were to televise this message nationwide.

John McCain is cold oatmeal, and I can’t imagine that anyone except his wife wants him to be president of the United States. But everything in Obama’s background comprises a sound reason to fear what he will do as president, particularly in the company of Nancy Pelosi and Harry Reid. At a minimum, we’re about to fail to learn yet again what made the Great Depression so lengthy and so painful. But the thug tactics Obama and his minions deploy give us good reason to fear a Hugo Chavez, Norte-Americano-style.

I’m not picking a fight. Both of these goons are national socialists, lacking all conviction but full of passionate intensity. McCain is nothing to be preferred. But Obama strikes me as a cipher very much to be shunned. The worst of it is, we won’t know the worst about Obama until after it’s too late. The blood-dimmed tide is loosed. May god spare us the oceans of blood that swept over us the last time we elected a socialist in a recession.

October 14, 2008

Videoplay: My idea of a halfway decent real estate video

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I haven’t talked about video for a while because we haven’t been doing very much with it.

That’s not completely true. We use the Flip digital video camera to share notes with clients fairly frequently.

But as I have discussed at length in the past, I have no use whatever for the typical Lurch-takes-a-home-tour style of real estate video. I see it as being anti-marketing, worse than doing nothing at all.

For video to work, there has to be a story, and I can only think of two stories that make sense in the context of listing a home.

The first is simply an interview with the sellers, and we have done this on other homes. The second is the documentary, an illustrated narrative about some aspect of the home or the neighborhood. An example of this would be a slow drive-by of the structures in the neighborhood with a voice-over narrative telling the tale, whatever it is.

Arguably, you could impose a fictional or farcical story on the home, but this strikes me as being simultaneously too familiar and too stoopid by half.

The population of pundits who don’t actually sell real estate is rife with people who swear that video is the wave of the future. But, even with a plausible and endurable story, video has other drawbacks. It can be a real bear to edit, both labor- and computer-intensive. The down-sampling necessary to make it work on web sites robs images of their detail. Moreover, real estate photography wants very wide-angle lenses — which make people look fat and exaggerate foreground-to-background distances.

The solution I’ve arrived it, for now, is to superimpose still images over the video. Talking heads are boring, but we can use stills to illustrate what they are talking about, lending visual interest to the total package.

Here’s an example, as processed through YouTube:

You can see a better example of that video on the video page for 56 West Willetta Street.

The video scene was shot with the Flip camera. The native AVI file was converted to NTSC video, which is native food for Apple’s Final Cut. The photos were just dragged and dropped Read more

October 13, 2008

Citing market downturn, Redfin.com cuts headcount by twenty heads

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Via intrepid startup blogger John Cook from his new weblog Where are John and Todd?:

Redfin today said it is cutting 20 percent of its staff as the Seattle online real estate broker prepares for what Chief Executive Glenn Kelman described as a “big dip.”

About 20 employees were let go, bringing total staff at the company to about 75 people.

Kelman said it was a difficult decision, but the right move given how the economic slow down is impacting the residential real estate market.

“Redfin’s whole business will struggle and fight and may yet fail,” Kelman wrote in a message to employees. “But the only way it is possible for us to succeed – and, even today, I believe we will – is if we adapt.”

In an interview, Kelman said that the company had been performing well up until about three weeks ago. Last month, he said executives even felt strong enough about the business to raise revenue projections for next year.

But once the economic meltdown hit Wall Street, Kelman said “deals started to fall apart.” And while October and November may still prove to be solid months at Redfin, Kelman said beyond that the outlook is dismal.

“As the stock market wiped out prospective down-payments, tours and offers dropped 30 percent,” said Kelman in his message to employees. “Transactions that were done came undone.”

More from CEO Glenn Kelman at Redfin’s weblog:

Today Redfin laid off roughly 20% of our employees.

Unlike other startups, our industry’s recession started a year ago, when home prices first plunged.

Since then, we’ve fought like starving animals, and with some success: while industry-wide transaction volumes dropped 33%, we grew revenues by nearly 50%. Traffic grew more than 300%.

Even a month ago, we were raising 2009 revenue projections. All our markets, now including Chicago, contributed profits.

But the past few weeks have seen a major reversal. As the stock market wiped out prospective down-payments, tours and offers dropped 30%. Transactions that were done came undone. October will still be pretty good, then we’re headed for a big dip.

Hence the layoff. Layoffs are painful for any company, but especially for a startup and especially, I Read more

October 13, 2008

Obama ups the stakes in his contest with McCain over who can do more enduring damage to the crippled economy

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Witness:

Democrat Barack Obama is calling for a 90-day moratorium on foreclosures and a two-year tax break for businesses that create jobs as part of a plan to heal the nation’s ailing economy.

The presidential candidate says banks that participate in the federal bailout should temporarily postpone foreclosures for families making good-faith efforts to pay their mortgage.

He also called for a $3,000 tax credit for each additional full-time job a business creates. The tax break would end after 2010.

Obama also is proposing letting people withdraw up to $10,000 from their retirement accounts without any penalty this year and next.

The Obama campaign emphasizes that these ideas can be done quickly, either through executive order or legislation.

Here’s a question that no presidential candidate, apparently, can answer: Where does investment capital come from?

A ninety-day moratorium to “temporarily postpone foreclosures for families making good-faith efforts to pay their mortgage” is stupid. A loan is either performing or it isn’t. The lender is never going to foreclose on a performing loan, although the threat or foreclosure may not be withdrawn for quite a while.

The corollary? If you want out of your mortgage, you have to stop making payments.

The tax credit is also pretty dumb. If $3,000 is the margin of profitability for a new hire, a few people might get hired.

But “letting people withdraw up to $10,000 from their retirement accounts without any penalty this year and next” will bleed the economy of lendable capital just when the economy is already bled white of lendable capital.

I can’t even think of all the ways this is perilously damaging. It encourages a run on retirement accounts, which will probably drive securities values lower over time. Individuals probably shouldn’t reduce their retirement investment stake just when it has suffered a terrible hit. Freeing up that money encourages still more spending on consumer goods — depreciating assets — where it is now invested in future growth.

But here is the worst feature of this insane proposal: Not only won’t that money be committed to future economic growth, but the people whose job it is to invest that money productively will have to think Read more

October 11, 2008

Boringly functional artwork in the service of marketing homes: If people can’t figure out what you’re selling, they won’t buy it

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I wrote about the back side of that card last week. It’s the Open House invitation for 56 West Willetta Street in Downtown Phoenix, a home we listed for sale yesterday. This is a full-bore Bloodhound launch, but the card itself is kinda boring, wouldn’t you say?

That’s not an accident. I could wish I were more talented as a graphic designer, but I’m a firm believer that, if something is so cool looking that no one knows what it is, you’ve wasted your money. As radical as our real estate signs are, they still look like real estate signs. And the most profoundly valuable graphic element on our signs was suggested by marketing-provocateur Richard Riccelli: The snipe in the upper left hand corner that says “For sale.” In the uncivil war between obvious and obtuse, obtuse wins all the glamorous awards and obvious wins all the money.

Which brings us to our directionals. I’ve been writing about custom directional signs for more than a year. In that time, we’ve gone through many designs, and we’ve never done the same thing twice. For this house, I think I’ve finally hit on something I like and will use again:

Could not possibly be more obvious, yes?

That “Buy me” call to action is swiped from Redfin.com. Their signs do nothing for me otherwise, but those two words are the essence of good copywriting, in my opinion.

In our own small way, we launch a house in the same we someone else might launch a new car or a new kind of dishwasher or a new magazine. Those business-card-sized Open House cards will be distributed to 6,000 homes. We’ll get a 1% or at most 2% response on that effort — extremely direct mail — but the chances are excellent that the ultimate buyer will be among the parties who come to the first open house.

And: The signs, the directionals, the web site, everything else we do to market our listings — these techniques sell houses. This is not rocket science. Drawing more attention — and more-positive attention — to a house will make it sell faster and Read more

October 11, 2008

If you have cash or can qualify for a mortgage, this could be the ideal time to grab a bargain-priced home in the Phoenix area

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This is my column for this week from the Arizona Republic (permanent link).

 
If you have cash or can qualify for a mortgage, this could be the ideal time to grab a bargain-priced home in the Phoenix area

The Phoenix area is hosting a wave of real estate investors like we haven’t seen since 2005. Unlike the novices who came here during the boom, these are experienced landlords. They’re here now because lender-owned homes are selling for bargain-basement prices.

They’re not alone. Savvy home-buyers are scooping up bargains, too, especially first-time homeowners. Interest rates are still attractive — even if the homes themselves are less appealing.

Interestingly, over the last couple of weeks, many of the lowest priced homes have seemed to evaporate. I’m guessing that October is going to be a banner month for closed transactions. Yes, most of these will be foreclosed homes, but buyers are performing the liquidator function, restoring the value of underperforming assets.

With so many homes selling, are we nearing a bottom in the Phoenix market? It’s plausible, if the number of sales meets or exceeds the number of newly-listed homes to be sold. But, even now, around 7,500 homes a month are entering the foreclosure process.

It could be a long time before that inventory is absorbed. And if it comes onto the market faster than buyers can snap it up, prices will continue to decline.

Visualize the real estate market as a pipeline. The home that gets a foreclosure notice today won’t hit the lender-owned market for three to six months. Are there enough investors and other buyers to snap up record numbers of homes, month-after-month, for the next two years — or longer?

The answer to that question is yes — if the price is right. If the demand for low-priced homes already exceeds the supply in the pipeline, prices will stabilize or even start to rise. If not, lenders will be forced to cut prices until buyers find them impossible to resist.

It’s an awful time if you have lost your home, and it’s not great if you are living in a home you cannot sell profitably. But if you Read more

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