So I was talking with some people today and they were asking about the RE market and what I think of the "slowdown" as if it was such big news. The market has been slowing since mid last july. I was reading an article on line and they were saying the same thing. as if this was a big surprise. http://news.yahoo.com/s/afp/20060730/bs_afp/useconomyproperty
In it they say people in contract now who thought they were in a booming market will be backing out. that's a load of crap. anyone who didn't see this train comming, was not looking around. Sure there's the folk that got on the band wagon late, but if they are that stupid, they'll likely go through with the sale. That's my 2 cents. They go on to say that because of this, the "real" housing inventory is much higher, really, I cannot see the people backing out of deals now, making a big difference on the current inventory.
Later they say that anyone who has any hope of getting out [of the market w/ their skin I suppose] has already got it on the market... They guy talks as if we've all lost our shirts already.
I guess my last point is this: everyone keeps talking about the over built situation. Las Vagas, San Diego, Florida. Well, certainly, San Francisco has built quite a few large scale condos, but SF I feel has really not seen that much building (relative to the other cities I've mentioned). Thus, My feeling is that while supply is up, I don't think it is going to be quite so devestating as some of these other cities. San Francisco, (thanks to our friendly tenants union) will for the forseeable future, be in need of condos. Especially, for those of the small scale variety (i.e. in less than 10 unit buildings).
well that's my 2 cents for the week.
Mike
Sunday, July 30, 2006
Friday, July 14, 2006
Inflation, Interest Rates and Real Estate
I'm no economist, I'm a Real Estate Agent. I see what is happening in the markets that I pay attention to and that's what I know. Its this: For now prices of real estate are holding pretty strong given the relative rise in interets rates. Now there is certainly some lag time between the change in the rates and prices due to the bond like nature of real estate (i.e. price and rates are inversly proportional because real estate is so commonly leveraged by mortgages). However that's not the only factor here. You see, prices of income properties are more closely tied to rents than they are to the cost of money. Everything that I've read says that rents are going up. I consistantly watch rents in Bakersfield and here in San Francisco. I watch vacancy rates and I watch the job market (especially the tech market since my former life was as a software contractor).
The amatures right now are concerned about what prices of properties are going to do in the short term so they are waiting holding off to buy or worse they are buying with risky adjustable rate mortgages. The pros are doing the same as they always do, they are buying the good deals and locking in income streams for the long term.
And Think about this: the people who will be getting killed by those negative amortization and adjustable rate loans will be selling at todays prices to the pros. They'll sell their nice single family home to a guy that was hording his cash and then the'll go and rent somewhere. Maybe rent a house, maybe rent an apartment. they'll have to do it. That is the sad part of the story, however the truth of the matter is that there will continue to be more and more people renting in the near future which means lower vacancy rates and higher rents. All of this is good for the savy investor who has the cash now to lock into a long term investment.
So will prices of real estate hold strong, will they rise slowly, or stay flat or fall? Who really knows. The short of the long is that regardless its a great time to invest in real estate. People who buy good deals today will lock into a (still) historically low interest rate on their loan, and will ride a wave of increasing rents. Its really what all of these baby boomers have been dreaming of. An easy way to latch on to a passive income investment, and ease themselves into retirement over the next 5 to 10 years.
The amatures right now are concerned about what prices of properties are going to do in the short term so they are waiting holding off to buy or worse they are buying with risky adjustable rate mortgages. The pros are doing the same as they always do, they are buying the good deals and locking in income streams for the long term.
And Think about this: the people who will be getting killed by those negative amortization and adjustable rate loans will be selling at todays prices to the pros. They'll sell their nice single family home to a guy that was hording his cash and then the'll go and rent somewhere. Maybe rent a house, maybe rent an apartment. they'll have to do it. That is the sad part of the story, however the truth of the matter is that there will continue to be more and more people renting in the near future which means lower vacancy rates and higher rents. All of this is good for the savy investor who has the cash now to lock into a long term investment.
So will prices of real estate hold strong, will they rise slowly, or stay flat or fall? Who really knows. The short of the long is that regardless its a great time to invest in real estate. People who buy good deals today will lock into a (still) historically low interest rate on their loan, and will ride a wave of increasing rents. Its really what all of these baby boomers have been dreaming of. An easy way to latch on to a passive income investment, and ease themselves into retirement over the next 5 to 10 years.
What are the internet realtors up to?
Well after I published my last posting (I'd been editing it / thinking about it for a week or so) I finally had a bit of time to get throught some of the realtor rags that had been piling on my desk. I try to give them a skim over when I can since each issue usually has one small bit of interesting info -- among all of the mindless realtor ads and fluf about this or that rising starr. Anyway they had an expose with the creators of Zillow, which I thought might be interesting, me being a ex techie. And I love Zillow, its a good product at the right price and very easy to use.
Getting into the meat of the article, they talked about where these guys came from; They are both ex Microsofties and were the ones that started expedia. You know Expedia, the online travel site that put a nail in the coffin of the Travel Agency market? They discussed how Zillow had all this funding and were building a great team of engineers and real estate professionals etc. And they discussed one other thing that was the gem I was looking for in this issue. The guys said several times that they would not discuss the plan for Zillow going forward, but they emphatically denied that they were going after the real estate agent piece of the pie. hmmm. well then, what are they going to do. The dull masses haven't even given it a thought, Zillow is great what more could we want. But these guys are seasoned entrapenures by definition they think big, really big and have the funding and staff to do it. So, what do they want? What are their plans?
My cinical mind says that they are after the tools and information market. They realize that Real estate requires more due dillegence than buying stocks or organizing a vacation. A personal relationship is required for most peoples liking becuase of the following reasons:
1) neighborhoods are very local and it takes a person who lives and works there to provide an understanding of it.
2) real estate buyers demand a level of due dillegence that is not demanded by travelers or stock buyers. that is physical inspections of the property.
3) They are complicated transactions which require constant communication between multiple parties over the course of an extended period of time.
Anyone who has examined the real estate market recognizes these and many more issues. They recognize that the real estate agents (at least the good ones) are doing a good job and add significant and worthwhile value to the process. Its the REALTORS associations and the MLS's that are ripe for picking. The Realtors associations have crappy tools and are loosing control of their prized monopoly on information. I don't want to say that real estate agents will not be affected by all of this, we will, but the association better make way for some competitors and soon because zillow is moving in.
Getting into the meat of the article, they talked about where these guys came from; They are both ex Microsofties and were the ones that started expedia. You know Expedia, the online travel site that put a nail in the coffin of the Travel Agency market? They discussed how Zillow had all this funding and were building a great team of engineers and real estate professionals etc. And they discussed one other thing that was the gem I was looking for in this issue. The guys said several times that they would not discuss the plan for Zillow going forward, but they emphatically denied that they were going after the real estate agent piece of the pie. hmmm. well then, what are they going to do. The dull masses haven't even given it a thought, Zillow is great what more could we want. But these guys are seasoned entrapenures by definition they think big, really big and have the funding and staff to do it. So, what do they want? What are their plans?
My cinical mind says that they are after the tools and information market. They realize that Real estate requires more due dillegence than buying stocks or organizing a vacation. A personal relationship is required for most peoples liking becuase of the following reasons:
1) neighborhoods are very local and it takes a person who lives and works there to provide an understanding of it.
2) real estate buyers demand a level of due dillegence that is not demanded by travelers or stock buyers. that is physical inspections of the property.
3) They are complicated transactions which require constant communication between multiple parties over the course of an extended period of time.
Anyone who has examined the real estate market recognizes these and many more issues. They recognize that the real estate agents (at least the good ones) are doing a good job and add significant and worthwhile value to the process. Its the REALTORS associations and the MLS's that are ripe for picking. The Realtors associations have crappy tools and are loosing control of their prized monopoly on information. I don't want to say that real estate agents will not be affected by all of this, we will, but the association better make way for some competitors and soon because zillow is moving in.
Wednesday, July 05, 2006
Realtors should get "TECH ACT" together
So one thing that I can't quite understand is why realtors have the worst of resources for their MLS solution. If you look around on the web today, there are so many web sites related to real estate. Moreover, the ease of use of these free web sites blowes away any MLS site that I've ever seen. Realtor.com or the Rapattoni web interface all just are really lacking. With the amount of money that goes into real estate, compared to the money that is funneled through these free web sites, you might expect that the Realtor's would come up with something better.
Here's what is even worse, Rapattoni has just come out with their next generation web interface, Version 10!!! You would think that many of the problems that existed in the last version would be resolved.. Nope, not one of the fundimental short-commings of that software have been addressed. Lets take a look and see:
1) The first and most glaring example of lazy software development is the fact that they continue to exclude any browser other than Internet Explorer. Hello! not the whole world uses IE. Yes, I will agree that Internet Explorer is a great program, but there are many reasons why someone would opt for a different browser or be forced into useing a different browser.
a) I'm using a Mac, or linux, or BSD computer and IE is not available to me.
b) I don't like Microsoft and want to use Firefox
c) I like some other browser better
d) I'm using an old computer and it does not have (or cannot run) the latest version of IE
what ever the reason is, or might be in the future, there is just no reason to lock ones self into a particular browser.
Rapattoni, says that their solution is workable since only the realtors are required to have IE. The public access and web pointers sent to client are said to workable on other browsers: This is crap since not all realtors use Windows. Further the problem gets worse for their new version of the software. None of the maps are viewable with browsers other IE. That means when a Realtor sends a link to a listing to one if his clients, unless the client is using IE, they will not be able to see its map. I wonder if there are other features that I don't know about, but probably.
Making this work on other browsers, is probably not so difficult, especially, since they went through all of that trouble to redesign the whole thing anyway. It certainly would involve their software developers to ramp up on a new software development package, but come on, this is not that big of a deal.
No doubt the decision was made because they got sold on this microsoft crap and did not even consider the end product or look at alternate solutions.
Their (lame) alternate solution for those who do not use IE is to provide a Citrix Server running their software. This means that everyone who uses a Mac, must log on to Rapattoni's slow servers access MLS there. Thus they must endure other realtors sharing the same compute resource as well as network delays and degraded user interface since high res display would make the network delay untenable. Yuck!
a) Its Slow. you are at the mercy of all the others using the machine and maintenance schedules of their servers
b) you need to do many more clicks just to get the thing up and running, this is critical when you have a client that walks into your office and asks you to see a listing at 123 anderson st.
c) you can't print anything unless you save it to your desktop first. doh.. what a pain.
d) while you can cut and past between other apps, it does not work easily or completely i.e. you couldn't copy a jpeg image or the like.
e) I also suspect the security of such a system since it is always asking you "do you want this other computer to write to your hard drive"
f) I'm sure I could think of a few more if I really wanted to spend the time on this. Lets just say that this is not a real solution to the problem.
2) OK lets get off the IE issue we've beaten it to death. Maps, well Rappittoni's new version does have a mapping feature that allows you to map several properties at once, but come on, hasn't the news gotten out yet that we all like Google's mapping interface a lot better? you can't drag the map around like you can w/ Google Maps. We all stopped using mapquest a couple of years ago.
Further, think of the possibilites, with Google Virtual Earth, (I know microsoft has this too, but google is more open) If Rapattoni used this interface Realtors could load 3d images of the property and provide REAL virtual tours. That's not going to happen anytime soon with rappittoni.
3) The user interface sucks too. Even the new version is crappy. I have this pet peeve about when software companies put a new look on their website or software and don't change any of the fundamental operation of how it works. All of the operations still take too many "clicks" to effect any operations. Going to the contacts and the looking at the automated property searches is a pain. Click the dropdown menu, then go to a page to select which client search you want to review. why can't I just goto a drop down menu of all of my clients? At the very least have a form to search for a client name.
4) Non necessary features, why is there a separate back and forward button, Isn't there one on the browser itself? What's all this stuff about having a task list and date book and contact list. There are great APIs for real PIM software that web applications could hook into, let others do it.. Why did they spend so much effort making their web application something it is not. If they spent half the effort partnering with and researching interfaces with other software, they'd have greatly imporved their results (even better they could have spent that energy on making it work on firefox).
Wouldn't it be cool be able to import from your PIM software clients and then organize them in order of what they are looking for or by likelyhood of them buying etc. Wouldn't it be cool if this web site were able to interface a generic Calander program with your listing escrow so for example it might propmt you for contingency and closing dates and would push them to your calander program.
I must admit there are a few neat features in the rappittoni software, but in all I'd give it low grades because it failed to provide a workable solution for everyone. As the resoruces available to the public become more and more accessable, it is important for Realtors to have the very best in technology in order to maintain our usefullness.
As Realtors, we have only 3 things that allow us to earn our pay:
1) expertese in facilitating deals
2) access to information
3) access to tools
as number 2 and 3 above are eroded away, we have less means to provide our clients the service they expect.
Here's what is even worse, Rapattoni has just come out with their next generation web interface, Version 10!!! You would think that many of the problems that existed in the last version would be resolved.. Nope, not one of the fundimental short-commings of that software have been addressed. Lets take a look and see:
1) The first and most glaring example of lazy software development is the fact that they continue to exclude any browser other than Internet Explorer. Hello! not the whole world uses IE. Yes, I will agree that Internet Explorer is a great program, but there are many reasons why someone would opt for a different browser or be forced into useing a different browser.
a) I'm using a Mac, or linux, or BSD computer and IE is not available to me.
b) I don't like Microsoft and want to use Firefox
c) I like some other browser better
d) I'm using an old computer and it does not have (or cannot run) the latest version of IE
what ever the reason is, or might be in the future, there is just no reason to lock ones self into a particular browser.
Rapattoni, says that their solution is workable since only the realtors are required to have IE. The public access and web pointers sent to client are said to workable on other browsers: This is crap since not all realtors use Windows. Further the problem gets worse for their new version of the software. None of the maps are viewable with browsers other IE. That means when a Realtor sends a link to a listing to one if his clients, unless the client is using IE, they will not be able to see its map. I wonder if there are other features that I don't know about, but probably.
Making this work on other browsers, is probably not so difficult, especially, since they went through all of that trouble to redesign the whole thing anyway. It certainly would involve their software developers to ramp up on a new software development package, but come on, this is not that big of a deal.
No doubt the decision was made because they got sold on this microsoft crap and did not even consider the end product or look at alternate solutions.
Their (lame) alternate solution for those who do not use IE is to provide a Citrix Server running their software. This means that everyone who uses a Mac, must log on to Rapattoni's slow servers access MLS there. Thus they must endure other realtors sharing the same compute resource as well as network delays and degraded user interface since high res display would make the network delay untenable. Yuck!
a) Its Slow. you are at the mercy of all the others using the machine and maintenance schedules of their servers
b) you need to do many more clicks just to get the thing up and running, this is critical when you have a client that walks into your office and asks you to see a listing at 123 anderson st.
c) you can't print anything unless you save it to your desktop first. doh.. what a pain.
d) while you can cut and past between other apps, it does not work easily or completely i.e. you couldn't copy a jpeg image or the like.
e) I also suspect the security of such a system since it is always asking you "do you want this other computer to write to your hard drive"
f) I'm sure I could think of a few more if I really wanted to spend the time on this. Lets just say that this is not a real solution to the problem.
2) OK lets get off the IE issue we've beaten it to death. Maps, well Rappittoni's new version does have a mapping feature that allows you to map several properties at once, but come on, hasn't the news gotten out yet that we all like Google's mapping interface a lot better? you can't drag the map around like you can w/ Google Maps. We all stopped using mapquest a couple of years ago.
Further, think of the possibilites, with Google Virtual Earth, (I know microsoft has this too, but google is more open) If Rapattoni used this interface Realtors could load 3d images of the property and provide REAL virtual tours. That's not going to happen anytime soon with rappittoni.
3) The user interface sucks too. Even the new version is crappy. I have this pet peeve about when software companies put a new look on their website or software and don't change any of the fundamental operation of how it works. All of the operations still take too many "clicks" to effect any operations. Going to the contacts and the looking at the automated property searches is a pain. Click the dropdown menu, then go to a page to select which client search you want to review. why can't I just goto a drop down menu of all of my clients? At the very least have a form to search for a client name.
4) Non necessary features, why is there a separate back and forward button, Isn't there one on the browser itself? What's all this stuff about having a task list and date book and contact list. There are great APIs for real PIM software that web applications could hook into, let others do it.. Why did they spend so much effort making their web application something it is not. If they spent half the effort partnering with and researching interfaces with other software, they'd have greatly imporved their results (even better they could have spent that energy on making it work on firefox).
Wouldn't it be cool be able to import from your PIM software clients and then organize them in order of what they are looking for or by likelyhood of them buying etc. Wouldn't it be cool if this web site were able to interface a generic Calander program with your listing escrow so for example it might propmt you for contingency and closing dates and would push them to your calander program.
I must admit there are a few neat features in the rappittoni software, but in all I'd give it low grades because it failed to provide a workable solution for everyone. As the resoruces available to the public become more and more accessable, it is important for Realtors to have the very best in technology in order to maintain our usefullness.
As Realtors, we have only 3 things that allow us to earn our pay:
1) expertese in facilitating deals
2) access to information
3) access to tools
as number 2 and 3 above are eroded away, we have less means to provide our clients the service they expect.
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