patrick.net

We've certainly had first hand reports from readers of this blog to the effect that they decided to delay purchasing after reading the arguments presented here.

I'm wondering how far the indirect impact reaches. For every "normal" person (read, not a real estate enthusiast, pundit, or pro) who abruptly decides to bubblesit, how many others does that affect, even if just by example.

An anecdotal second hand story. I've mentioned that I have a reliable contact in the RE industry (though not in the agent/broker side) at a big, exclusive, high-net-worth agency. He overheard two agents last week complaining that a buyer of a multi-million place in SF had walked away before closing the deal. The agent directly blamed "the internet, where there's so much false data". He told me he quietly chuckled and wondered if it was this blog that was "the internet" in that case.

"Are we helping, hurting or just fooling ourselves"

It depends on who you ask.

If you're a realtor (or just play one on TV) we're definitely hurting! We've provided a venue for those "on the fence" and perhaps have begun to question the MSM. If three people constitutes a "gaggle" at the water cooler we've somehow managed to gather about 10,000 people around this one. Realtors wish we would just choke, puke and die.

We're helping the legions of posters and lurkers that just can't seem to find the "real dope" no matter how much research they try to get their hands on. If it were not for this blog and the ability connect w/other housing bears how long would it be before I questioned my own position?

We're fooling ourselves if we think we can save those that don't want to be saved. Knife catchers and GF's would continue to pursue easy money with us or without us.

Anonymity? For those that are "industry neutral" (meaning their livlihoods are not contingent on their personal observations and opinions) I applaud their courage. As the bust becomes more widespread and flat out undeniable perhaps more of us will reveal our "true identity". For those of us in the investment arena venturing the "wrong" political opinion can be career ending! But who knows? Most of us are hardly "hams" but who among us can resist a 'victory lap' after being SO right?

George,

Hey George!

The standard is a lot lower, but the insight can be just as valuable.

I'm not sure even that is true. There are plenty of blogs that exceed the "journalistic standard" exhibited by the mainstream media. NPRs recent inclusion of Casey Serin is a case in point. He/they would experience much tougher standards of proof here than in USA Today or NPR.

George

OT - did you persuade your fiance to wait?

Can I say fuck on the air?

What's our "cut" for the interview?

LILLL,

You know, that's true. I try to e-mail the folks that tell it like it is and give them kudos whenever possible! What's funny is that on the east coast (where they have wealth outside of real estate) the authors are kind of indifferent about the prospects for a crash! Here out west where RE is as much a religion as anything authors (and their readers) have a natural tendency to get much more emotional about it.

Correlation is not causation. The existence of a large number of housing blogs does not accelerate the collapse of RE prices any more than "An Inconvenient Truth" accelerated global warming.

The housing collapse is a slow, wrenching, drawn-out process. As with global warming, there are a lot of commentators predicting doom and gloom. But the actual devastation takes a very long time to play out.

In my opinion, the RE market will only return to sanity when it has to. And that will happen when the people making the decisions are cold, calculating profit-maximizers instead of starry-eyed Trump-wannabes and financially illiterate FBs.

We have seen homebuilders slash prices because they know the jig is up and it is time to unload inventory. This is because the HBs are rational profit-maximizers. Once banks and other lenders find themselves holding massive inventory in a few years, they will do the same. They will make a rational calculation of the expected yield of a home if it is held as a rental property (including all taxes, insurance, management costs, etc.) vs. the expected yield if they slash the price of the home so that it can be sold at whatever price the market will bear. At that point, and only at that point, you should see the relationship between rents and home prices return to normal and you should be able to find some reasonably priced homes.

There is very little that bloggers can do to accelerate this process.

I have to stress that no blog has the ability to affect mass psychology. We could not have caused any change in price, nor could we have affected homebuying pattern in any significant way.

... In other words, don't wait around for sellers to lower their prices because of a blogger-led change in market psychology. Sellers won't voluntarily budge because the August '05 appraised value of their home is "in the bag" as far as they are concerned. The banks will have to lower the prices for them.

I tend to agree with Glen and Peter P, as is probably evident from my topic article. I think that opinion leaders do matter, and they ultimately affect the larger population even with housing, but it is a slow, painful and unreliable process.

I also think that blogs do not largely affect public sentiment except in very narrow, specific situations. This is changing, but the change will take time as it is essentially a demographic shift. Older generations don't derive as much information from, or trust information they find in alternative media. As they pass, so will traditional media in its current form. But it's all related. Blogs too will change as they rise in importance. This is already happening. There are actually "professional trolls" who are paid to infiltrate influential political blogs of the opposition, as are there viral marketing bloggers.

Picking up on my last point, the time is approaching (probably faster than any of us expects), when blogs will completely discredit themselves. We're pretty comfortable that the personalities in this community are real people with genuine intentions. But fast forward to a blog 100X bigger than this in reach. At what point does it become profitable for someone to employ a "subversive agent", whether a program or a person, to infiltrate and guide the direction of conversations?

I've mentioned this a long time ago, but I am directly familiar with one venture that works on very sophisticated natural language processing (NLP) software, and applies it to blogs. Their bread and butter is reading sentiment in real-time by parsing blogs and "machine reading" the conversations. They provide feedback to the likes of consumer product companies about how various brands or offerings are being received.

But, they have been working on a pilot (or two) project to reverse the flow. That is, building upon vast databases of NLP parsed conversations on hundreds of millions of topics, they're endeavoring to create smart agents that will be able to search, find and automatically infiltrate blog conversations. Not the dumb spam-bots that just look for the words "real estate" and drop in mortgage broker advertisements. But very subversive "auto trolls" that will establish themselves as real personalities. And, they create their own fans, their own critics, and can cause an opinion-leading blog to shift in sentiment.

All that would be just so much future-fiction musing, except that they've been testing and refining in the real blogosphere for almost two years now. And if they are, there are others doing it too.

Finally, someone will figure out countermeasures. Like anti-spamware, they'll create anti-NLPbot ware. But by then, most people like you and I will have long relegated blogs to the same regard we now hold corporate media: always suspect.

Randy,
Do you have something to tell us? Somehow your posts sometimes just seem a little too... perfect. :)

Aww... SFGate didn't mention my blog. Boo. :(

Do you have something to tell us?

Did I mention my nickname is Turing? lol

RE: the reach of blogs, I see it this way. Popular sentiment is like a big, fat, slow moving amoeba (blob). The amoeba moves by sticking out little outcroppings (pseudopods) back and forth, until one holds and then more follow, and pretty soon the blob has changed direction. I think blogs in general are sort of like these pseudopods, constantly testing out new directions until a larger portion of the amoeba (MSM) follows, and eventually the rest of the "masses."

This is not to say that blogs have any huge influence, but there is probably a real "trickle-down" effect. NPR purportedly hunting around blogs, and rumors on Ben's blog (a few months ago) of various MSM articles and shows basically "lifting" ideas from that blog are clear examples of this.

Did I mention my nickname is Turing? lol

Tell me more about why you mention your nickname is Turing? lol

Before he was initially banned, I briefly suspected CG of being a babble-bot with a lookup table of troll remarks fired off in response to key words.

It's coming, if not here already.

She is convinced that people like me are the ones hurting her.

You did not have the power to hurt her. You merely made a prediction.

However, I think predicting the death of a king is high treason in old England. ;)

@Jon,
Don't worry, you're not missing anything. I'd print the article on this post, but maybe a snoop from the NYT will call us on copyright infringement!

If you want to hear it from the horse's mouth, check this out (was posted on the last thread by someone else):

http://realtytimes.com/rtapages/20061103_campaignneg.htm

Written by that REIC douchebag, Blanche Evans.

Let me go on record...

Blogs do not have any non-negligible effects on real estate prices. They never intended to affect prices and they will never be able to affect prices.

@Sven,

Talk about shooting the messenger! First, you were reporting data which is in the public record. Second, sounds like this unfortunate woman is still living in extreme denial about SD housing prices. It still sounds like you guys are significantly ahead of the curve compared to the Bay Area, no?

Blaming the internet for talking about housing prices going down is just like Sulieman blaming the media because he’s going to jail for stealing people’s identities and buying houses with them.

Blame is just natural. Not that it has any basis.

The housing price correction is part of the economic cycle. It was triggered by interest rate hikes.

Randy H,

Well that certainly is interesting. I had noticed that when the "gold bugs" come out the ads at the bottom would suddenly change to:

What the Fed doesn't want you to know! (or)

How to prepare for the coming ______ crisis!

I had no idea things were that advanced. I agree w/Glen I don't believe this is anything new (other than the application) but I'd like to believe that I could spot NLP as quickly as which one of the "girls" in Singapore wasn't really a girl? In my mind BOTH would be equally embarrassing! If I got duped into becoming a "fan" of some NLP generated blogger I sure wouldn't be talking about it!

as quickly as which one of the “girls” in Singapore wasn’t really a girl?

@DinOR,

Uh, care to elaborate on your "experiences" in Singapore???? Or is it, "what goes on in Singapore, stays in Singapore?"

Back before they "cleaned up" Bugis Street (kind of like Bourbon St. or the Strip) they had it ALL baby! Heroin, opium, hash whatever. And of course for "Her Majesty's Loyal Subjects" time for something completely different while "on holiday"! Damn freaks.

Seriously, the waitresses would come to your table with a photo album of Sing's finest "bennie boys". Most were fairly obvious but there were always a few that might be able to pass for female. I just thought it was a good analogy for Randy's super advanced jukubot b/c of the ability to pass for human (in this case a different gender). Nasty place.

DinOR

People are incredibly sophisticated parsing machines. I'm sure both skibum and DS could elaborate from different perspectives, and astrid could work in some philosophical basis as well.

But I don't think you have too much to worry about just yet. It is my opinion that neither the raw computing power nor the sophistication of algorithms yet exist to accurately fool humans into misidentifying non-humans as being human.

It's the "qwirky" things we do that are hard to mimic without detection. Use of idioms. Regional flavors. Emotional authenticity. AI can replicate those things, inject believable variability, even adjust to responses very convincingly, but it's that little "something's off" that it can't get right.

Machines used to be too perfect, so we could pick them out. Now they're too perfectly imperfect. Even feigning imperfection is too precise.

But someday it will come to pass. It's only a matter of time. Around then it will be time to pick up old Asimov and familiarize yourself with the laws.

I think its just human nature to blame someone, anyone.
After all, in this Great Land of Litigation, if you're not making easy money, then someone needs to be sued...

Personally, I'm not in the least bit surprised, or threatened by it. If it makes people feel better to blame a small bunch of people online for the woes of the housing bubble, then let them.
Its not going to stop what's happening, nor is anything we here (and on other blogs) do or say.
As nice as it would be to think that I have a minute bit-part in bringing down the housing market, its hubris to really believe it to be true.

As long as some nutjob doesn't come after me waving a machete or an AK-47, blaming me exclusively for the crash in the housing market, then let them have the biggest bitchfest ever seen. It can't hurt me and it makes them feel better

I hate blame. It is unproductive.

People should start blaming themselves. Or the stars.

Not if accompanied by a fair but stiff prison sentence and/or fine!

Still not productive.

When will people start taking responsibilities for their own actions? People who make the wrong financial decisions deserve to lose everything.

Then people will learn to make better decisions.

Following up on my follow up (I need to go out for lunch more often and get off this blog)...

It's not that the NLP/AI infiltration agents have to be entirely unrecognizable as artificial. They only have to fool a few people for a short time to effectively change the direction/sentiment of a blog. Go back 2 threads to the Troll discussion, and read the Wiki on Trolls. It is a very interesting psychology at work, how Trolls can hijack and affect the conversation downstream with only minimal efforts upstream, even if they are easily identified as a Troll.

The same is true of infiltration agents. They're just super sophisticated, automated Trolls with programmed purpose.

And the reason these NLP guys are the guys to do it is they have the data and technique to know how to predict what inputs will result in which sentiment outputs. Just programming a TrollBot is university comp sci stuff. But knowing how to impact sentiment a certain way is venture-capital funded with big hopes stuff.

Sven,

The footage shown nationally of Sulieman (and his wife) were to die for! I never imagined I could get so turned on by a gal using profanity like that and hitting a reporter in the face with an empty water bottle! Especially the thinly veiled death threat of "knowing people south of the border" and going back to her car for a......gun?

I was ashamed (but I wanted more!)

I think Mr. Sulieman has suffered enough.

People who cheat and win, need to be nailed too.

Only if they bend the rules so much they break.

You cannot blame Enron executives for everything. The investors themselves were more at fault. They should have known better.

Did they say that Nixon was bad because he was caught?

I do not think Nixon was that bad.

I am not a cheater though. I believe in karmic justice.

Nixon was a pubpol (public-facing politician) working for the interets of finpol (financial establishment).

Just substitute GWB for Nixon, and it's a perfect fit. On second thought, most US politicians fit that bill.

On second thought, most US politicians fit that bill.

I doubt even the Bolsheviks were for the people.

Oh I was hoping everyone could do me just one little tiny favor?

Could we please once and for all stop referring to the twisted, hodge-podge gaggle we all know and love as real estate as a "market"?

Calling this "abortion that lived" a market is an insult to real markets. You all can call it what you want but please, can we stop calling it a market? It isn't.

OK, I'm setting up a used wheel barrow exchange!

Wasn’t it he who took the dollar off the gold standard?

So now it is legal for you to own gold.

But you know, they can still confiscate gold a la New Deal.

Of course.

I have a bank account opened in Canada. Will get a safe there, too.

I think if the amount is more than 10K you need to report to the US Treasury. Correct me if I am wrong.

Canada is the way to go! Global Warming is good for Canada!