patrick.net

The free market will determine the true fair commission.

But first it must be a free market.

OpenMLS, Banzai!

@HARM,

As has been said before so often, none of these areas were completely immune to price drops in prior busts

I think the more sapient point here is that truly upper income communities (like Atherton, Belvedere, etc.) are far less exposed to price drop effects *in terms of impact on wealth*, than the rest. If an Atherton mansion sells for 3.85M instead of 5.5M, that's a huge amount, but it has less effect on the owner's wealth than the 1.2M McMansion selling for 850K--in fact the McMansion owner may be forced to walk away and take the default while the Atherton guy has old money and real assets, and often owns a much larger equity stake in the house (or he has a private wealth manager who has helped him to diversify his assets so as to marginalize his home-equity-wealth exposure).

As to Realt-Whores making commissions.
unfortunately, like stockbrokers, they rely upon th commission for income.

Unlike the realtor(tm) broker crime family syndicate, stockbrokers operate in a largely open market. Without a cartel, they have faced very serious competitive pressures on transaction fees; thus the flat-fee/flat-rate brokerages.

So most transactions (pretty much all retail transactions) are unit-priced. The lexus-leasee cartel instead gets to perpetually price on a deal-value rate. They *only* get away with this by breaking US antitrust laws and using their lobbyists to keep from getting brought to due justice.

In case anybody was wondering, the partners at my husband’s large, first tier law firm make between $300,000 and $3,000,000 dollars. So they can be quite well off or barely able to get their foot in the door of a nice SF condo (at 3-4x income).

It really depends on whether the firm is making money. Some specialties really got hit hard by the tech bust (e.g. immigration). Some are doing really well.

PS, there is no particular problem with the "resilience" theory. However, it may not be immediately clear that which market segment is resilient.

On the other hand, resilience may not imply that prices will not crash; it may merely suggest that prices will rebound and exceed prior peaks sooner.

Here is a NYTimes article on online services which provide much of the info horded by realitors:

http://tinyurl.com/e4bfr

Specifically zillow.com and redfin.com

@zeke --thanks for the article!
Great stuff. Hopefully this will be the first nail in the coffin for the Realt-Whore MLS cartel.

And, remember, you are entitled to it.

They have earned their equity inflation too!

SQT,

I almost have to wonder if that wasn't a gag-listing:

I have two week before i loose my houses
Ok, buddy i'll be right over to "tighten up" those houses.

No Mortgage Brokers or loan officers Please, I cant Refinance, I am a broker Myself.
Huh?? You're supposedly a "mortgage broker", but you can't even refinance yourself?

I have two week before i loose my houses

I know this is a no-no, but I can't refuse:

loose Audio pronunciation of "loose" ( P ) Pronunciation Key (ls)
adj. loos·er, loos·est

1. Not fastened, restrained, or contained: loose bricks.

(apparently passing the rigorous examinations to become a mortgage broker are only marginally harder than become a realtor(tm))

Tip: For zekes' NYT article (above), use BugMeNot.com.
An excerpt:

Redfin, though less well financed than Zillow, is perhaps even more ambitious in its aim to take on the work of agents. The site, which maps listings with other sources of real estate data for Seattle, added a feature last week that allows a visitor to buy a property online.

Redfin shows the potential savings on every listing. For instance, the "direct savings" on a $699,000 house currently for sale in the Queen Anne district in Seattle is $13,980. The buyer gets the money at closing so it can be used for the down payment or to pass to the seller if it was used to sweeten an offer.

Has anyone out there personally ever used any of the online MLS/Realtor competitors (ZipRealty, Help-U-Sell, Zillow, Redfin, etc.)? If so, what are your impressions?

I have only used zipreality but never bought. I used a realitor for a while and got access to cleanoffer.com which gives me good, accurate mls info in Marin. With that, and a tool like zillow I don't see much value for a realitor...except the contacts for closing, inspecting, etc... However the way the system is set up unless you find a house for sale by owner, it is hard as a buyer to get any price reduction by not using a broker.

Since the seller realitor will snag the full 6% (which basically gets passed on to me the buyer) and will split it with my agent if I choose to go there, there is really no benefit in not having a realitor...unless one of these online realitors gives you 2% back of their 3%.

In such a scenario I can definately see the value of one of these brokers.

But to answer HARM's question, I've not really used them.

Regarding the "buying without an agent, but seller has one problem": what I've done is set up an Excel spreadsheet (as any informed buyer does), but added in a commission structure iterative calculation to reflect a reduction of the commission structure in my final offer price. This has worked for me in every purchase I've made, but then again I've always walked away from ridiculous situations (like multiple offer bid wars).

Zillow.com is great technology (using googlemap), but I see one fatal flaw: the data is market lagging. Perhaps this holds up well in a normal, slowly rising market, but it is way off for the present.

I checked a home I've tracked in Corte Madera. Zillow shows it valued at 1,333,875. This home listed for 1.4M late last spring, and sat without a single offer. It eventually relisted 3 times, the last for 1.15M, and still didn't move. My estimate is the home is worth 850-925K in a normal market, but it's been driven up by the silliness of all the comps in the neighborhood over the past couple years. In fact, I really think they're just averaging comps with some dimensional aspects (probably sqft and #BRs), but I'd have to spend more time there to be sure.

Randy H,

I have to second Steve the Owner --Zillow is amazing.
Yes, the "Zestimate" price is based on lagging-indicator comps, but so is any Realt-Whore's estimate. In fact, I bet there's less room for deliberate distortions and error because Zillow has no reason to "game the comps" in favor of always-higher prices.

One of the best features of this site is it graph a timeline for any home's appreciation/depreciation (the giant bulge since 2002 for my current place is really striking) and it provides you with the past sales history, without having to go to the County Assessor's office or website.

One small blow against information assymetry, one giant leap for buyer-kind!

Revising my comments on Zillow:

I did check on the Hawthorne Ln. listing in Corte Madera I was skeptical about more; I hadn't looked into the 10yr timeline. This shows that this home was only valued at between 600-700K all the way up until 2005, when they listed it for 1.4M. At that point Zillow doubled the value, and it stayed there for the year it was listed (and relisted over and over). Now it's coming right back down towards it's real value.

The best thing is that I had *overvalued* the home. Zillow tells me it's even less than I had thought.

zillow pretty much shows a ~45% hike in Marin in the first months of '05. Then flat to a dip since then, depending on the price of the house...higher prices bigger dips.

Perhaps Google should go into the real estate business by incorporating MLS into Froogle.

I wear "cheap" as a badge of honor. I find it especially useful as a serial entrepreneur--it sends a pretty clear message to the employees.

I wear “cheap” as a badge of honor. I find it especially useful as a serial entrepreneur–it sends a pretty clear message to the employees.

What kind of message would that be?

Many of my socks have big holes. So long as I do not take off my shoes...

Randy…I have learnt to avoid these companies which I call JUNK statrtups …. I earn 160K per year with good work life balance ….

Good to know that our filter is working as intended.

btw, the only startup of 5 I've been involved in that was a junk failure was the dot-com during the boom which spent money like water and bought engineers personal environment pod workspaces. The other 4, which were very tough, long-hours, cheap as possible succeeded and employees who hung out long enough made off quite well upon acquisition--significantly better than annualized 160K per year. That is, afterall, the risk-reward proposition of a startup. It's not meant for the CSR have a celebration cake party every thursday crowd.

How do you know if a redneck is married?

Ans. There's tobacco spit stains on both sides of the pickup.

What's the difference between Bigfoot and an honest Realtorâ„¢ ?

Ans. There have actually been sightings of Bigfoot.

Zillow is seriously flawed in some suburbs.

I am tracking a few houses in Los Altos Hills, zillow is showing the few I am tracking with an estimated value of 700K-800K all the way from 01-04, and had a huge spike to 1.5-1.9M in 2005.

Trust me, if I could find Los Altos Hills in 2003/2004 that were only worth below a million (2500+ ft home, 1+ acre land), I would have sold my home and traded right into LAH. That would have been my wet dream come true.

So somehow I don't trust the pre-2005 value at all. At least for Los Altos, Los Altos Hills, Saratoga, Los Gatos, the values prior to 2005 are all off, WAY off.

@Mr.Right & Owneroccupier,

Now that I've plugged in various addresses into Zillow and played with the chart a bit I'm beginning to see what you mean. The pricing data prior to about 2004 is not too reliable. No matter what address you plug in, you see much lower-than-actual median prices prior to 2004, and then a very unlikely spike after that to current valuations.

This is after all, a brand-new site still in "beta" phase. Hopefully, they will get all the kinks ironed out and more reliable historical data going forward. For now, it's still useful for the recent comp values and very convenient for getting the sales history (without having to track it down from the county tax assessor).

This is a friggin' hoot!

http://tinyurl.com/cyxrv

GREENSPAN SENDS MIXED SIGNALS IN FIRST DAY AT HOME
Former Fed Chief’s Inscrutable Statements Baffle Wife

In his first day at home since stepping down from his post as Chairman of the Federal Reserve, Alan Greenspan made a series of cryptic, inscrutable pronouncements that left his wife, NBC’s Andrea Mitchell, totally baffled.

“I kind of feel sorry for him,” Ms. Mitchell said. “I think he really misses moving interest rates.”

Did anyone see the news: Stocks Rise on Word of Oracle Job Cuts

The market is now rallying on every piece of bad economic news. This happens last time in 1999/2000.

We may see a double (stock/RE) bubble burst.

Did anyone see the news: Stocks Rise on Word of Oracle Job Cuts

The market is now rallying on every piece of bad economic news.
This happens last time in 1999/2000.

Peter P,

This is an interesting observation, but I'd say you've got it slightly wrong. As long as I've been paying attention to such things (15 years or so), I've noticed that EVERY time a prominent U.S. company announces sizeable-to-massive layoffs and/or outsourcing, the market rallies. And it's not just 1999-2000.

There almost seems to be a direct relationship to American layoffs and stock market rallies --as though the big market players see any sign of damage to average working Americans as a good thing. Same goes for pension cram-downs.

Being a Chicagoan at heart and of “eastern european” descent it’s hard for me to criticize Larry Ellison. Did you mean to imply that because a far larger percentage of ORCL’s revenue (vice MSFT’s) comes from business (Fortune 500 companies) this is a sign of “belt tightening”?

At first, I thought the reaction was a classic market response to layoff. However, ORCL itself went up little more than a few pennies a share. I immediate got a feel that it was growth/employment/interest-rate related.

I do not think that the ORCL cut is revenue related. I believe they are undergoing massive outsourcing. They have an impressive compound in India.

I do not like the flamboyant personality of Ellison too much. For the same reason, Steve Jobs is not my favorite either. I prefer the low-profile type like Buffett and Soros.

(I worked for Oracle for a few years.)

You know, all of these boomer generalizations are crap.

I have nothing against boomers. I have a few boomer friends. Most of my serious "flipper" friends are Gen-Xers. Boomers do it in a much smaller scale.

I love Chicago. Last time I got king crab legs and fillet for only $24. It has the best steak deals in the country. :)

Do you seriously believe that “boomers” are:

1. The only homeowners on the planet?
2. The only RE speculators?
3. The only greedy bastards out there?

Bay Are Homeowner,

I can understand how you might get that impression as a casual observer to the blog, but the reality is that a number of regular posters here ARE boomers (disclaimer: I'm not), and I think, good people. And no, the rest of us don't all believe that 100% of Boomers are greedy, self-absorbed, narcissistic hypocrites, though to be perfectly honest, MANY ARE. To also be perfectly fair, many of my generation (X) and younger (Y) are every bit as greedy, self-absorbed and narcissistic as your stereotypical boomer.

Yes, there's quite a bit of Boomer -bashing/ranting from time to time --some of it well deserved, IMO. I guess it really comes down to numbers and cultural trends. As a generation, the boomers trump everyone else in size and power to influence national politics and economics. The boomers were also responsible for promoting an extreme form of individualism during the Counter-Culture period of the 1960s-70s. Remember "The ME Generation", "Tune in Turn on & Drop out", drug culture, etc.?" These socio-political movements are not some figments of a Gen-X's delusional mind --they really happened.

As a result, Boomers get the lion's share of blanket criticism, which may not be fair to those boomers, such as yourself, who did not participate in such nonsense. If you feel personally slighted, I apologize --that is not my intention. But please take a hard look at other boomers around you. Are the criticisms you read here really all that far off the mark?

HARM, any chance we can start a housing deadpool? IE, predict the prices on overpriced BA properties, and get points based on how close we are?

We did have a F*cked County thread a long time ago. Perhaps it is time to have a version 2.0?

I do not like the flamboyant personality of Ellison too much. For the same reason, Steve Jobs is not my favorite either. I prefer the low-profile type like Buffett and Soros.

Peter P,

Jim Collins (Built to Last, Good to Great) would definitely agree with you. Buffet & Soros are closer to what he describes as "Level 5" leaders.

"Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It's not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious --but their ambition is first and foremost for the institution, not themselves."

Fewlesh, Peter P,

We most certainly can have another dead pool thread, but shouldn't we wait for the verdict on the first one (when Dataquick releases the June 2006 numbers)? I'm thinking late July/early August.

You know, all of these boomer generalizations are crap. There are plenty of us that are just living our lives and going to work each day and trying to make ends meet just like everybody else. A little more of a civil tone would be greatly appreciated.

I was going to comment, but @HARM But please take a hard look at other boomers around you. Are the criticisms you read here really all that far off the mark?

I truly enjoy when the boomers out there get offended when we lift the lid off of the boomer whore orgies. Odd that us X'rs and Y don't mind when you spew venom about us, because I know you aren't talking about me or my friends. What's the matter boomer? Don't like the comments because they hit a little close to home? I bet at least half of your friends and siblings fit the typical boomer mold, amazingly selfish, living in grandiose visions of your common drug hazed youth. Why the hell do you think all the car companies are remaking musclecars? Why are there so many "classic rock" stations? Why because 60 is the new 30. No, no it's not, it's just embarrassing. Bad boomer, no orgy for you. And remember just because you got high in Berkeley in the early 70's doesn't mean you participated in Dr. Kings freedom marches. I'll use a bit more civil tone when the boomer hoard quits sucking the well dry. Sure Gen-X is contributing to the greed, but come on halfbaked how can a generation with less than half the numbers of the boomer hoard influence much? Whether you like or not your generation is defined by self-centeredness, greed and a desire to forever be a stoned 20 year old. You can't help it, you were marketed to since you were a coon-skin cap wearing snot nosed pre joint rollin moron. Get over yourself, buy a Dodge Magnum, Viper, or a 500hp Corvette and suck that freaking well dry, why not you and the hoard deserve it. Come on, look at how hard it was dismantling all the work your parents did. Shit why build companies when you can make more money for yourself by sending everything overseas. Sure as hell isn't the 35 year olds that are doing this. I can go on and on, Enron, MCI, Tyco, ahhh yeah, ice statues pissing vodka for a trophy wife, Gen X? Not a chance, just another aging boomer pushing the hair over the bald spot and trying real hard to convince himself he has still got it going on.

Didn’t they just buy peoplesoft or sap or some other company? It probably took this long to figure out who the duplicates are so they can lay them off.

They probably knew who are the duplicates of their possible Indian counterparts long ago.