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Wednesday, September 2, 2009
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88 comments:
Frank has a new post on his real estate blog on the effect of the 48k tax rebate.
This is the comment I left there. You can all feel free to weigh in here or there if you have more to add or feel I've misrepresented the consensus on this blog.
cara says:
Your comment is awaiting moderation.
September 2, 2009 at 7:37 am
Hi Frank,
We’ve been talking about it ad nauseum in the Nova Bubble Fallout Blog. So much so that it’s just short hand, we call it the $8k buyer’s bribe. Guess you’ve been too busy with the buying frenzy to blog lately.
It’s been a frenzied summer. But given the closing deadline things are already starting to slow down. Vienna slowed about a month ago, Burke is just starting to slow now. It all depends on how close to $400k the entry level market is in a given area. If starter places are under $400k (vaguely affordable to the income cap of $150k for couples for the $8k incentive) then the market stayed in its seasonal rush for longer.
There could be further frenzy now, as the inventory declines (seasonally) and those last few people trying to take advantage but out-bid all summer try to buy. But I doubt it will be as much of an effect as already happened this summer. The mini-bubble already happened. Prices for TH’s and condos in Burke were $15k-$20k over what they were last summer (partly due to interest rates a full point lower).
However, unlike the limited time cash-for-clunkers, the $8k FTHB credit was something people could plan for, so the rush probably already happened, as people prefer to move in the summer. What both really do is pull future demand forward. Those who might have waited another year to save up more money for moving expenses etc, bought this year instead. So even if it’s extended, the stimulative effect will taper off, because you’re just time-shifting when everyone buys. If however, they let it expire, that will create a gap in demand, which could be a fabulous time to buy if there’s any inventory worth buying in the dead of winter (there’s always something, and there may be enough SS’s and REO’s still trickling out).
I think Congress will be watching September car sales closely to help them decide what to do about the $8k.
Cara, good point. My thought: the surge from the stupid bribe comes in two phases: In the beginning, buyers who had held of the previous few months (in anticipation) as well as idle fence-sitters who were easily pushed off the fence. The second phase will come at the end, where every single first time buyer that might be buying say in the next six months will make a deal by the deadline. If the bribe is allowed to expire, the market will hit the ground with a mighty thud.
My prediction: NAR and NAHB and their disgusting counterparts will get their way with Congress. The bribe will be extended. Since keeping it as-is really won't impact the market too much, and raising the bribe amount won't either (who would go for $15k that wouldn't have gone for the $8k?), they'll extend it to all buyers. Non-first time buyers are a relatively small group. I'm one of them, but I know hardly anybody that bailed out of the market like I did. So that won't do much to "stimulate" the housing market. Here's who they'll target: people who already own a house (and have for a long time), are financially stable because they didn't use it as an ATM machine, and could be enticed to buy a house to rent now that rent/own is evening out. I speculated about this with my dad last week, and he agreed that it would at least be a very tempting proposition if he were offered the buyers bribe. I suspect that the govt could create millions of potential investor buyers if they did this, and that is exactly what NAR is pressuring them to do. What do you think?
Cara,
I've approved the comment.
Love it if others would post specific links to blog posts talking about, whether (those looking to buy now) should wait until just after the tax credits expire.
Thanks
Frank
Kevin,
That's just frightening. Please no.
Frank,
It was so much the underlying assumption here that the bribe is distortionary that I'm not sure we discussed the question in that particular light. I'll see what I can find though. It would have been back near when it was initiated. Housebuyer used to tell us all that if you were planning on buying anyway, the low interest rates + $8k made it a good time, and we'd all shout him down, but not exactly on the conditions of now.
To get an opinion on what buyers should do now, I think we'd need to reopen that question. Because prices are higher now and inventory is less than when we last discussed it.
Yawn, I'm so sleepy..the housing bill that went to committee 6/6/09 extends the 8,000 thru 2010 and expands it to all homeowners removing income barriers. I know in PWC the price drops themselves was responsible for the high volumn with the 7,500 tax credit being a non-player in the beginning of the massive sell-off. The 8,000 bribe was important to the 100,000 and less crowd but eliminated first timers over a certain income. Yep, thats right. There is still an untapped first time buyer market, people that can really afford to buy! Do I think it will pass, yes, and probably in Sept. or right after Congress reconvenes 9/8/9. Do I think anyone should wait? In a word..Hell NO, if you find the house you want at the price you want to pay, nail that sucker down.I know alot of you hang your hat on CS but I don't. I expect housing news will be "scary" until they can get that government stimulus money allocated to buy foreclosure properties for low income families. AS every person here knows all of NOVA has had a serious shortage of housing for low income or the working poor. Elected officials haven't had the "nerve" to propose massive funding for housing the poor in years so they are taking full advantage on the federal and state levels to beef up this area of housing. I know what they are doing and quiet frankly, I don't care. I believe it could have been done more cost effective but politically suicide if attempted, so there ya go. Just my humble opinion. Real estate taxes fund to many government functions to let prices slide further. That's a fact. prop up housing prices or face steeper declines in the economey. Don't expect any changes in tax laws concerning deductions on interest, either. Not this term except for maybe the heloc because oviously people were not putting that money back into their homes but paying for cars and college.
Kevin, non-first time buyers are usually the majority of buyers in general (move up, 2nd home buyers, investors, etc.). Maybe you were referring to a different population?
Not finding what you meant exactly but here's a choice kevin comment from 5/18/09
kevin has left a new comment on the post "Northern Virginia Bits Bucket 5/18/2009":
housebuyer, I agree, but there are no certainties that one will be able to stay for the long term. Certainly divorce, death, loss of job, disability, and relocation could all prompt someone to need to sell. If rates are really high at that point, they could be in a world of hurt. Either way I'd wait until some of this pent up inventory starts flooding the market. No point in buying when there are 15 offers on houses, artificially driving up prices. Any potential sellers out there had better get their house on the market ASAP and take advantage of the new pool of idiot buyers looking for their $8000 bribes, thinking prices will shoot back up. If you're a homeowner, this will be your last chance to walk away with bubble money.
So, clearly kevin at least feels that the $8k is a great time to sell, i.e. a terrible time to buy.
Cara said...
"Kevin,
That's just frightening. Please no."
I know. But it would do exactly what these industry whore want to have happen: massive sales transactions and price wars to again artificially raise the price levels. It would push away a lot of future first time buyers (heck, they're already pushed away because so few can save up 3.5%, let alone 20%), and would make a lot of people that already own homes landlords for rental properties. If I were an evil NAR economist or strategist, that's exactly what my plan would be.
It would be the worst thing ever, but it would definitely work for a while.
Cara, You flatter Frank Llosa by saying he has been busy this year. He has had no listings sell in 2009 and he has been a buyer agent for 2 sales. His year to date sales volume is under $2 million. He is known in the real estate market as a webmaster and a blogger. He has little real world experience in real estate but just re-shuffles MLS data. His service is to the bubble blog not to real estate sales. That is fine but you should know what he actually does for a living.
Ace said...
"Kevin, non-first time buyers are usually the majority of buyers in general (move up, 2nd home buyers, investors, etc.). Maybe you were referring to a different population?"
I wasn't referring to move-up buyers, but I don't see how they could be excluded. The bribe would have no impact, short of covering some of the absurd transactional fees. I was at first referring to people that don't meet the three-year non-owner rule. That's a pretty small crowd. What I think they'll do is expand it to everybody, particularly targeting people that already own a home, and want to buy an investment property. There are a lot of folks out there that are not impacted by the market downturn and are capable of buying. It's a pool of potential investors that can be manipulated - I mean motivated - to buy buy buy.
Cara: "So, clearly kevin at least feels that the $8k is a great time to sell, i.e. a terrible time to buy."
That quote was over three months ago, but I think that I was pretty spot-on there. Prices bumped up quite a bit the past few months, and are now waning. Any seller that took advantage of the market manipulation going on the past few months should be patting themselves on the back.
link
Dang, 2M in sales is like 60k. You cant even eat in NOVA for that salary, much less pay a mortgage.
Has anyone in Congress spec'd out the cost of these credits? Let's say there were 8M sales in the credit time period and 3M of them qualified for the credit. That's a cost of $24B dollars. How is that paid for? If you extend it another year and apply it to ALL sales, you might get 12M sales or more and cost the treasury $100B. I just don't see how they will pay for that.
skeptical,
He's the lead of his firm, so most of the transactions are done by agents under him. I've been extremely pleased with the level and professionalism I've gotten from Jeff Royce, my agent who works for Frankly.
If he's catering to the educated buyer market, so be it. Damn good thing someone is. It was an ignored and underserved market. People who do the due diligence themselves but still need someone with the experience to help with the transaction.
Everybody's got to have a niche.
Shamrock, 3,000,000 X 8,000 is 24 Billion?
Pulling the troops out of Iraq saves between 12 and 15 BILLION a year and they come home loaded with cash ready to buy homes since they generally save the hazard pay for that purpose.
CNN has a "What I bought with my 8k" article up today. Two of the couples disgust me.
How does this couple even qualify for a 750k FHA loan and meet the income cap for the 8k?
And this couple couldn't even save 9k for the FHA 3.5% without the 8k buyer's bribe. What do they think will happen when they lose a job or don't get a raise, or have major car trouble?
I'm just angry and bitter that it's still possible for idiots like these everywhere to keep propping up overinflated prices, then get foreclosed on and expect me to pay for their bailout with my taxes.
shamrock,
I don't know whether Congress has yet (you could search through the Government Accountability Office and Congressional Budget Office for specific reports if you're motivated enough) but Calculated Risk has been doing just that.
Certainly they will attempt to price it our before passing it. In fact with the "pay as you go" policy, I believe they have to. Price is the reason housebuyer thinks there's only a 10% chance of extension.
CR using NAR's statistics puts the cost at 1.9 million first timers * 8000 = $15.2 billion so far, divided by 350,000 additional sales ("calculated" simply by comparing to 2008 transaction numbers) or $43k per additional sale.
Arkey, Kevin,
Just because everyone wants their own government cheese doesn't mean the government will feel compelled to give it to them. Where's my pony? :)
I want the 15K, not the 8K !
If they'd pass the 15K I might just get off the fence...
For what it's worth (agreeing with Cara's obeservation)
the 6 zips that I watch in LoCo & Northern PWC - in the over 500K market - nothing has hardly sold during the Month of August....
skeptical,
Why would a buyer's agent have listings? Sellers' agents have listings.
He's also in law school. That would keep one busy.
kevin,
thanks for the clarification.
Cara, I don't have a dog in this fight over the bribe money. I assume they will do whatever they think is the best course to save local and state coffers after the tarp money is gone. I'm gonna pay one way or the other. Yes, I have a house on the market but the 09 market in PWC has gone up every month since Jan, not down every month like in 2008. Whatever they do doesn't really impact my selling because the prices are already locked in an up position through the end of the year meaning the deranged county assessor will not devalue my home like she did in 09 because of the 3and 4th quarter fire sell in 08. I'm lucky that I don't have to sell and if I don't this time, no bigey next year I will list higher or just sit out till I can sell for what I can buy after all the market is up nationally not just PWC. I'm not gonna lower my standard of living to sell to somebody that is still hunting for that 2008 killer deal.
Jeremy,
hyperventilating....
"I got a great deal on the mortgage. The interest rate is just 3.5% for the first year and costs about $1,500 a month, with taxes and insurance. The rate goes to 4.5% the second year and caps after that at 5.5%, about $1,900 monthly, which we should be able to swing as our earnings go up."
you couldn't save up $9000 without draining all of your savings but you think you'll easily be able to swing a $400/month increase in rent. (home ownership, all the risks of owning, all the costs of renting... fun fun fun).
Some of the stories were okay... Mainly the ones where people would have bought anyway. Which just goes to show how useless the credit was other than as stimulation for the rest of the economy in what these people purchased.
Cara: "Just because everyone wants their own government cheese doesn't mean the government will feel compelled to give it to them"
I think given NAR's power and their history of always getting what they want, it'll be easy for them to get what they REALLY want in a time when Congress wants to dupe the public into thinking they are "helping" the economy. I'm a real cynic, but I just don't see how they can not do this and screw us all over.
Arkey, pulling the troops out of iraq would save $12-15B a month, not per year I believe.
Far be it from me to question CR's numbers, but he clearly calculates the cost based on NAR's existing home sales numbers. Doesn't the credit apply to new homes sales as well? I think he is missing that one.
Arkey,
I don't think either you or Kevin want a pony, exactly. It's just that your argument for why it would happen boils down to "because people want it".
I also don't think the tax assessment has any causal effect on what your house will sell for, but that's just me.
How's the traffic been? Don't you think it would improve if the income cap were eliminated and the "first-time" qualification were dropped?
Isn't that in your best interest?
Given one of the stories at CNN, where the couple said they delayed their purchase until after March to get the credit, it's altogether possible that you're seeing a dearth of buyers partially because some higher income buyers are holding off until after November to see if the government sweetens the pot. It's a possibility anyway.
If this were the case, eliminating the uncertainty itself should bring in more buyers.
shamrock,
He's calculating them based on NAR's report on home sales, and NAR's claims on 1st timers, the credit and the amount of stimulated buying. So, new homes should be in that.
OTOH, there's no strong basis to believe NAR's numbers at all for any of those things. I.e. you are right to wait for the GAO or CBO to do an analysis if you want more accurate numbers.
yep Shamrock..ya got me, ya got the tater. I meant a year.ooops my bad.
Cara..I just passed out..a hair dresser and a crane operator buying a 750,000 house? Oh my word, that's just crazy. My GAWD will it never end? I did see a show where a couple of copasuers were looking to buy their first home and they were looking in the 1.2 - 1.3 mil range, yes, Ca. I thought maybe they were on the take.
Arkey,
holy moly, I didn't read the caption.
In answer to Jeremy's question, since they are not married yet, they can qualify for the house on both incomes and then qualify for the full credit based on one of the two incomes being under $75k. (or is it 70? whatever) This still begs the question of which of the two of them makes over $100k, the hair stylist or the crane operator.
Cara, traffic is good and I have had a couple of close calls but couldn't make the deals work. Just a heads up to all potential VA 100%buyers, don't ask me to pay all your CC when you are using a full price realtor espically if the realtor in toe was brought in after you found the house and I showed the house then a week later you contact a realtor for the first time, use my listing agent or a discount agent because the VA really has your back. I don't have enough markup to kick back 16,500 to a realtor, you and then take a gamble on a Va Apprisal coming back a 1 or 2% under contract price which they normally do. Other silly things..asking for hardwoods to be installed or guranteeing the septic for 1 year after closing? Excuse me? bye..bye..the list gets even crasier so I'll just stop
Arkey,
Does your sign in sheet ask them who their agent is? If the listing agent is who showed them the home without them stating who they were working with, can't the LA claim the full commission (or whatever commission there is)? I guess demanding that just makes it too messy and contentious and not a good foot to start off on anyway.
But offers, offers are good. Means it's only a matter of time until a "real" buyer comes along.
Oh Cara, I had 3 different familys show up one Sunday for an Open House that wasn't scheduled! The first 2 sundays, yes..the third I was suppose to be off. Anyway, I showed and 2 were very, very interested. One was working with a realtor and I have no problem paying realtor fees to a realtor that has been busting azz for their buyers. The other was looking for a family member out of state who did not have a realtor. I ask specifically for my realtor to follow-up with later. They made an offer the next week after she contacted a realtor friend and the other got royally pissed off because they though we were playing them with the old offer game. So, there you go..no good deed goes unpunished. I didn't have 16,500 to throw at her friend for writting up a contract.
I forgot who ask about the neighbors house in Blooms Crossing but it is under contract.
Does anyone know about Baltimore neighborhoods? One of the couples on the website Jeremy found moved into a rowhouse in the "Canton" neighborhood in Baltimore. They spent $119,000.
According to a little search Canton is by the water and has historic rowhouses many dating from the Civil War.
I know someone who recently moved to Baltimore and works in DC. She claims the commute on MARC is not that bad. I'm not convinced but some days it's tempting. Unfortunately I'm just too emotionally tied to this area.
This FHA program using the 8k as a down payment is so ridiculous. Responsible taxpayers are paying for their down payment, backing the loan, and then paying for the bailout when the buyer needs the loan modified. Then they default anyway and the taxpayer takes the hit.
I'm so tired of paying taxes to help others price me out. They keep finding new ways to kick the can down the road. I'm convinced that a month after I buy all these stupid programs will end and my home will plummet in value.
I imagine even in Baltimore something a whole rowhouse for $100s must be a former (or currently) bad neighborhood. Still, try finding a $100k home even in bad neighborhoods in DC. Of course, unclear to me why crime-ridden neighborhoods in DC can command more than $100k for a home.
Jeremy,
I think every analysis shows that few banks are modifying loans. The only thing that is really happening is many people are living in the homes payment free for months as banks try to time the foreclosures.
Remember also that during the tepid Northern Virginia housing market of 93-97 we saw late spring/summer boosts in prices and then a dead market in the fall/winter.
Even if they extend the $8k for a year I don't see a rush to buy homes. People will feel they have until November 30, 2010 so why rush to buy in the fall/winter when they can buy next spring/summer.
Jeremy,
(uncontrollable laughter)
Yes, they're going to pull the rug out from under prices the instant you give up and buy.
Why I've stopped worrying about that, I'm buying something that's cheaper than renting even at 7% APR. Take 120x monthly rent as a loose approximation for cash-flow investors and consider that the floor. Find out how much money you would lose if you were forced to sell for that amount by forces beyond your control. Then calculate how long it would take for your savings over renting to make up that same amount. If it's less than 5 years don't worry about it. If it's more than 5 years, calculate how much of your downpayment you would lose, and then make the decision if you're willing to "spend" that much money to own rather than continue renting.
There is a floor for prices, it's called cash-flow positive. Our employment picture is rosy enough that we don't have to worry excessively about decreasing rents or losing population.
If you're looking at the move-up market not the starter market, I say you can safely take straight rental parity as the natural bottom. If buying and renting are the same price with 10% down and 7% interest then other buyers will see that as well and continue to buy supporting that price level for that neighborhood.
If you're looking at Arlington you'd better have money to burn anyway because that's what the houses are priced at, and if you have money to burn why are you worrying about it?
Jeremy said...
"I'm so tired of paying taxes to help others price me out. They keep finding new ways to kick the can down the road. I'm convinced that a month after I buy all these stupid programs will end and my home will plummet in value."
This sums up my feeling and reservations about buying right now. I'm sick being told "buy now, interest rates are low," because I know that if they are high in the long term, that will destroy the value of what I owe, which is worse than missing out on a 1% difference in interest now. I see so much manipulation and artificial scarcity out there. The forces that be REALLY want people like me to buy, but I see it as them wanting me to buy at an artificially high price. No thanks.
National average 30 year fixed rate mortgage rate
Robert, Woah!!! It dipped under 5, maybe I should lock even though we haven't heard back from the seller's bank yet....
For TBW only because it's been posted before. I know you posted the unemployment rate yesterday and I wanted to find something that was one of the more bearish links that I worry about.
Cara, Arkey,
I thought it was pretty standard for crane operators to make 6 figures. Think about the level of responsibility and skill needed. That couple could easily be pulling in $130k per year. Though that still seems awfully low for a $750k mortgage...
My $0.02
Arkey said, "I forgot who ask about the neighbors house in Blooms Crossing but it is under contract."
Arkey, thanks for the heads up! Can't wait to find out the sales price.
Some hair stylists do really well. Arkey, have you ever been to Tranquility in Manassas? My mom's hairstylist there makes over 100k.
And way way off topic, but if anyone is looking for a fun outing for next summer, we went to a beautiful lake beach today. Never been there before and the kiddos had the best time. It was deserted but the park ranger says it gets busy on weekend afternoons during the real summer but is pretty empty in the mornings.
Here:
http://dnr.maryland.gov/publiclands/western/cunninghamfalls.html
about the CNN story...
wouldn't the couple who bought the $750K home have to put down a huge down payment for the monthly PITI to be $1,500/mo? ($300K loan?) if so i don't see a big deal about the purchase.
MM,
The $1500 PITI was for the other couple, not the 750k couple.
So I just read that CNN article and found this related story, the "life after foreclosure" gallery. Probably old news to you all, but seriously, how do you spend 50k at Sylvan Learning Center in one year? I think you could hire a live-in governess for that!
http://money.cnn.com/galleries/2009/real_estate/0908/gallery.Life_after_foreclosure/2.html
Cara, Now you are flattering yourself to think that Frank Llosa and Jeff Royce have a "niche" among the "educated." Jeff Royce's few listings and sales have been in Dumfries, Manassas Park, Woodbridge, Manassas and Centreville -- hardly desirable spots for educated people.
Ace, Apparently Frank Llosa and Jeff Royce both list and sell properties -- not just very many.
skeptical
You and I have different definitions of "educated". Mine was very well circumscribed within the comment, to those who care to do their due diligence. Yours?
Jeff is listing and acting as the selling agent where prices are good, where buying actually beats owning as a financial proposition. Doesn't get much more educated than that.
You act as if these bubble blogs were (a) wrong about prices falling from their peaks (b) not filled with potential buyers waiting for when the time is right to buy.
skeptical,
to be more precise, I should say, "I get the impression that" rather than "you act as if".
skepticism is good, but what's your angle?
skeptical,
I know all kinds of educated people who have owned homes in those areas. There are some really nice areas of Manassas, Centreville, Woodbridge, etc. They may not be your cup of tea, but a lot of people find something to like in them especially families.
Cara, My angle is the entertainment value of the overwrought people on this blog.
skeptical,
I think you're also missing the context that I generally try to say only nice things about people unless they deserve otherwise. I could just have easily have laid into Frank for only now warning buyers about the frenzy and artificially inflated prices caused by the increased demand from the $8k and ~5% interest rates. We've been warning people about that all spring. But I didn't, because, he's a realtor, and if people want to buy now, that's their decision, just his to facilitate.
There. Are you happy now?
skeptical,
Ah, I see. I thought I detected Cara-baiting in that comment. Cara-baiting is too easy, one would think that takes the fun out of it.
Jeremy,
Thanks for clarifying that.
It just so happens that someone I know recently bought a $750K home on one income (wife does not work). It's doable because he's put down a whopping $350K. Kudos to people like him who saves saves saves (while living in a crappy apt) since post-doc for years, and finally bought a very nice home. And with the $8K credit to boot.
I am declaring shenanigans. skeptical clearly is a rival realtor. Who else would care about how FranklyMLS is viewed?
skeptical also said,
Jeff Royce's few listings and sales have been in Dumfries, Manassas Park, Woodbridge, Manassas and Centreville -- hardly desirable spots for educated people.
100% disagree. I concur with HayfieldGrad. I know plenty of well educated people who live in each of those areas (and we have some on this blog). I'm pretty certain that all of the areas listed have a MUCH higher percentage of people who at least have a college education than the Virginia or nationwide average.
I am a principal broker in Nova and whether Frank,Jeff,Megan,etc, have sold 10 homes or 100 this year is of no matter-Frank Llosa (who I do NOT know at all)has made an incredibly valuable contribution to our industry by staking out righteous but unpopular(with the legacy brokers)positions that WILL eventually have an impact on how real estate is transacted here.I am sure that the "old guard" at NVAR/NAR consider Frank a royal pain in the a**, but why can he develop a"mls" better in many ways than MRIS? Why is dual agency still permitted in VA? Why do consumers continue to meekly pay "admin fees" of up to $500 a transaction? Why do agents continue to post SUCKY photos in MLS when it is the single most important factor in getting showings-aside from reasonable pricing? Frank has been a visionary...and I salute him! And on the admin fee thing- NOW a listing agent at a Large and Famous brokerage is asking(in the Realtor comment section-you wont see it) that THE BUYER pay the $345 admin fee that Large and Famous charges...Frank/Harriet-that might be worth a post-cant believe that that is going to be well received!
Cara: Back from Corolla and met with my real estate agent today to list some properties. She told me a story I thought you might find interesting. She is putting a condo on the market at The Berkeley in Ballston and was there with a photographer taking pictures of the condo and photographer also took photos of lobby. While doing so, she ran into Lawrence Yun who is the chief economist at NAR and who lives in the building. She did not know who he was, but he asked her if she was putting one of the condos on the market (I guess the photographer was the clue). She said yes, and he introduced himself and said that this was a good time to sell before the next wave of foreclosures hit. My agent asked him when that was going to happen and he said right after the $8,000 credit ended in December. She also asked him what was going to happen to interest rates and he basically said "who knows."
Looks like skeptical has an axe to grind.
Bitter competitor?
Awfully personal, though. Wonder if Frank has any exes who are realtors?
Wow!
Go away for a day and get flammed.
1) Yes I am in law school, more below.
Who is this Skeptical poster fella? He new to the conversation, or also a rainer?
Obviously s/he has MRIS access, so they are a REALTOR, and are breaking many laws by posting on forums anonymously.
I thought maybe he was using www.FranklyMLS.com which is the only PUBLIC site that actually lets you look up an agent's track record on the listing side, but he mentioned buyer data only on MRIS.
(for that matter, I have been considering adding the buying side data. Do you all want to see that? Let you search by the agent's name to see his purchases too?)
So yes I am in law school. Just transferred from the Night time program at AU Law (4 years &summers) to the Daytime program (3 years). It is 1am and I still have to read for my 10am class.
Yes I run a little brokerage that I am proud of. Kinda takes some time, even if it is "virtual"
Yeah, I also built from scratch a website called FranklyMLS.com. Managing constant upgrades and trying to find more ways to bring data to the consumer faster and in an easier to read format.
Oh yeah, won an Innovator of the Year award by the main Real Estate News company. (Kinda a big deal)
Skeptical, don't believe all the data you see. Did you know in 2004 I was NVAR Rookie of the Yr with something like $50M in closed transactions under my name? Made me the #1 agent under 30 ...in my first year. Long story, but it is NOT as good as it looks.
Number padding... been there done that. I played the "#1 agent" game, and won. Took the title and no longer need to chase it.
I do pretty well for myself. I do let some of my agents take the lead on some deals as I'm in Law School. Unlike many other firms that put the numbers under one person so they can play the "#1" game. I like the agents in my firm to have ownership. They own the stats.
I'm am actually proud that we as a firm don't do a boatload of deals.
We don't just sign people up and throw up listings, or rush people into a purchase.
If you only knew
1) How many buyers I talked out of buying (more through playing devil's advocate than telling them not to buy)
2) How many buyers I decided not to work with.
I'm lucky in that we aren't starving for business, so we can take on fun, educated clients (like Cara).
As for making enough to feed myself, I'm doing just fine. Each year since my "$50M" opening year has been better, at least my taxman says so.
Thanks for your concern, I do accept donations if you feel I am hurting and shouldn't have just gone to Africa. (I did have a closing today ;-) For which I drove from class, and then back to class afterward.).
And Cara, as for the $8k scramble, I'm talking about the end game people that are freaking out. "Gotta get it in days under the wire", and to counteract CNN's articles to hurry up. Those are the people that I don't want overpaying. But I know you got my back. I think the summer increase was due to the banks not placing inventory into the marketplace.
Oh and NinjaRealtor, thanks for your kind words (I was in class during that posting, so I can prove it wasn't me).
NEW Tip: Large companies that were charging admin fees... they have a new trick. They add it into the commission amount so it doesn't stand out as a new line! Brilliant concealers!
Goodnight, (or until the infamous attacker comes back to get the final word, just watch...)
Frank
"or until the infamous attacker comes back to get the final word, just watch..."
You have been on the internet before haven't you?
We love you Frank! Your website is amazing! I feel sorry for any other area markets that don't have it. Best wishes with earning your law degree. Since that article about the lack of law positions for new grads appeared in the NYT you will probably benefit if you can stick with it - while discouraged others turn to a different direction.
Anielarke,
You are golden! Lawrence Yun "admitted" that the REO's were going to hit the fan the instant the $8k is gone???? Why on earth the banks would chose that as the timing is beyond me, but man oh man is that interesting....
Meshell,
Arkey, have you ever been to Tranquility in Manassas? Yes and it is very, very nice but to pricey for me to be a regular. Its a treat place for me.
Cara, Do you think it was tongue in cheek comment about banks waiting until the incentive to buy foreclosures? and finally
Frank..I'm a seller that appreciates your web. I can check my listing against new listings and see for myself if I need to lower my price. It isn't just buyers it is also sellers that have to protect themselves. I am NOT saying realtors are bad people. They just want to sell your property and they don't or can't keep track of market conditions 24/7 without this type of tool so they shouldn't be "beating" you up.
ooops Cara..notice "he said" right after the 8,000 bribe ended in Dec. It ends Nov. I thought if anything he would have mentioned the no FHA Condo loans after Oct 1.
Oh well, I think we were spoofed.
Arkey
It could have been. I'm terrible at reading tone in comments. It certainly seems too good to be true, especially with the big, "why in the heck would they do that?" problem, and why would Lawrence Yun know what the banks are planning anyway? Too conspiracy theory.
Frank,
I get the "hiding of the admin fees"-must be all of those class action suits striking a nerve, but putting in comments that YOUR BUYER will pay THEIR company admin fee of $345 is a step beyond, I think. Check out Appling valley...I have no problem with others charging an admin fee to THEIR clients-in fact I welcome it-it allows us to differentiate services- but to MY CLIENT-on THEIR listing?
"Everybody's got to have a niche." regarding Frankly MLS....
I heartily agree. Having personally identified and captured a number of under-served Internet markets I can tell from experience that if Frank ever transitions from a free site to a pay site he's going to make a fortune. The real money is serving the masses, not subsets of the population.
I would absolutely pay to have access to Frankly MLS data. No doubt about it. The business model already exists...Carfax. Huge market (almost everyone needs a car at some point), variable memberships tailored to need (1x, 30 days, annual), and easily understandable information.
He's hit the nail on the head that Frank...:)
Too bad carfax is a fraking waste of space. There's no requirement that the reporting be timely. All carfax can do is warn you if something is in their records, it doesn't protect you at all if something happened more recently.
Carfax, carmax all just making used-car dealers even worse than they already were.
sorry, unrelated rant off.
Yes Frank I would love if there was a way to search buyer's agent data.
That's an interesting comment from Lawrence Yun, but I too wonder how he'd have access to that data. It does seem like there's been more properties coming on the market lately in the neighborhoods I watch, and I personally know a lot of people who are planning on selling in the near future. Not to mention there are sooo many properties I've been watching that have been under contract for months and months, but they can't close the deal.
"This still begs the question of which of the two of them makes over $100k, the hair stylist or the crane operator."
(Tower)Crane Operator. Tower Crane (Massey et al) operators for construction sites are very high dollar. It's usually the highest labor rate on the quote, sometimes more than the PM in charge. Been there, done that. I had to budget $150-$160/hr. in Houston and Dallas for Tower crane operators for billable time. These are the guys that build high rises sitting in those tiny cabs 40 stories off the ground.
Yeah, they make good cash. But there are only a few hundred at any given time in the USA, a few hundred more worldwide.
Texas Native,
Fair enough. The follow up question is what's going to happen to this guy's income when commercial high rise construction slows down (starting this year) from the commercial real estate slump? If there's only 100 or so operators, that doesn't sound pretty. Maybe he'll get paid well to work for months at a time overseas? That seems plausible to me.
If only Frank could increase the transparency in health care like he's done for the masses in real estate . . .
Transparency is good.
Those that are afraid of transparency are those that can not compete on a level ground.
Hey Arkey-
Continuing offtopic ;)--Tranquility has a hair school right in that shopping center with Kmart--I have had great cuts there and the prices are pretty reasonable (around $35 or $40 for a hair cut and style?). It does take forever though b/c there is a stylist basically walking the student through everything. But it is nicely decorated inside, with snacks and drinks, and a relaxing afternoon ;).
Thanks Meshell, I didn't know that. I can take a long afternoon of doing nothing..it sounds great..and for those of you that don't know..this isn't much of a risk because they hire the best already in the biz..
News Robert will love:
Federal Government Needs Massive Hiring Binge, Study Finds
I don't see them hiring enough in this economy to make much of a difference, but it least it makes me feel a little better about longer term home values in the area after the bailouts are over. I'm still afraid of buying sooner rather than later (1 year+).
Jeremy,
Yeah I saw that and was going to post it and then I read it and by the end of the article came away with the impression that um, yes, Feds are retiring, but we don't know when, or if Congress can stomach replacing them, and in any case the Fed as a percentage of the US population is smaller now than it has been historically...
Basically, we did a study!!! And found that we have no idea what we're talking about. The headline sounds nice though.
Frank: Is there a way to check how many people are tracking a property on Franklymls? I got a status update mailed to me recently for a place that went under contract, and the update said "This home is saved by X other users."
Jeremy
the GMU study on local hiring is a lot more concrete (and hence more reassuring) to me. The Anonymous posted it the other day GMU study
http://www.cra-gmu.org/current-indicators/USandWashingtonAreaEconomiesAug26.pdf
In point, counter-point
NY Times: A Reluctance to Retire Means Fewer Openings
In other parts of the developed world, people are retiring as planned, because of relatively flush state and corporate pensions that await them. But here in the United States, financial security in old age rests increasingly on private savings, which have taken a beating in the last year. Prospective retirees are clinging to their jobs despite some cherished life plans.
As a result, companies are not only reluctant to create new jobs, but have fewer job openings to fill from attrition. For the 14 million Americans looking for work — a number expected to rise in Friday’s jobs report for August — this lack of turnover has made a tough job market even tougher.
Cara,
That is why I'm still bearish in the near term but bullish long term. These people have to retire or die eventually. I know two couples who were scheduled to retire last year and are now working an extra 2-3 years to "get back their losses" and will retire then. It gets easier for them the closer to 65 they get because of Social Security benefits and Medicare.
WaPo scary factoid-filled article on the debt loads of older Americans
Novawatcher. Yes. In spreadsheet mode it will show you the number of views. You can even sort by most popular. And once on the fullview page it should say how many are watching it. I think it should be in the upper right.
Cara, I haven't trusted GMU data since 05. I think they make stuff up and get paid by nvar to do so.
Frank
Frank,
Interesting comment on GMU. For real numbers we'll have to wait for the census as always...
And, indeed I was appalled by CNN's coverage which implied you should hurry up and get your $8k while you can! That is definitely the message that the media is sending if they're sending one at all. And I can't even count how many realtor fliers have been put at the door of my apartment touting buying with 0% down due to the programs that let you monetize the $8k into a second mortgage.
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