More Meaningless Marketing
August 21, 2008
When I read this headline this morning, I immediately thought of that Britney Spears song, “Oops! I did it again!” Once again, another real estate company is reporting some “numbers” designed to get people - consumers, agents, Martians - to gasp. Seems like their website has generated some few millions of “leads” to their agents. You know, buyers who go on their website and ask for more information. It’s another orchestrated PR campaign to get the public to say, “Wow! That’s a lot! It must mean they are really good!”
Too bad, then, that it’s just another example of totally meaningless marketing. What’s worse: Generation X and Y know it.
Five Reasons REALTORS Are Losing Market Share
August 20, 2008
Amongst the growing list of reasons some REALTOR firms are losing market share today, there’s no lack of ‘blaming the consumer’ causes. Brokers and agents who repeatedly target the “market” or the “economy” as the culprits are just substituting politically-correct keywords for “the consumer” as the problem. Buyers won’t come off the sidelines. Sellers are unreasonable and won’t price their homes to market conditions. Lenders won’t offer credit easily. The usual suspects of the downturn are either consumers or third parties working together in a full-blown conspiracy to destroy the real estate industry.
Perhaps we could find a few simpler reasons?
Poor REALTOR.COM!
August 4, 2008
I feel bad for REALTOR.COM. Let me start by saying that I like REALTOR.COM - I really do. They’re a hard working bunch that puts lots of time, energy and effort into promoting other people’s products. They aren’t always perfect - yet they keep trying, and trying, and trying. And they do have the number one real estate destination on the web - so they are doing something right. But for long?
This week they announced their their latest round of new features for the website. Too bad it’s still fairly clear that REALTOR.COM is destined to fail.
Why? Because one group of people hates the site most of all:
The REALTORS themselves.
So Long, Housing Crisis
May 22, 2008
Well, thank goodness for someone who understands the markets - other than the lopsided “woe-is-us” viewpoint of the National Association of REALTORS (NAR). In fact, when it comes down to it, maybe we should ask more Wall Street analysts and hedge fund managers to really monitor the markets for us. Here’s the good news, from the Wall Street Journal:
The Housing Crisis Is Over
By CYRIL MOULLE-BERTEAUX
May 6, 2008; Page A23The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now….
Apparently, the real estate market is better understood by measuring housing inventory than simply hand-wringing over dropping prices. Since bubble-pricing had nowhere to go but down, then the true measure of the market cycle is better monitored by measuring absorption rates rather than price swings. This makes sense because commodity prices rise and fall with the volume of sold; not the other way around.
Of course, in REALTOR mentality, the reverse is true: if prices rise, the number of homes is expected to rise; when prices crash, REALTORS can’t sell homes - not because buyers don’t like a bargain, but because too many REALTORS don’t know how to put homes on the market at the right price. And the right price is always determined by the buyer, not the seller. As long as REALTORS take their pricing orders from the sellers, they won’t recover their sales volumes. Once they understand that their job is to create a transaction, not represent the pricing strategy of an unskilled seller, they will be back in the saddle. Commodity (stock) brokers have always understood this: If a stock holder calls and asks to sell their shares at 20% above the current selling price, the broker attempts to explain to them how a market works. If the seller insists on an inflated price, the broker hangs up the phone. Only REALTORS agree to take on the expense and waste their time trying to sell overpriced commodities - because they agree to run their business according to the seller’s insanity, not the buyer’s authority.
New Housing Deal or New Deal Housing?
May 19, 2008
Real estate professionals should be upset today. A terrible blow for the integrity of the real estate industry - for housing as a foundation of personal equity and wealth, for the rule of law in mortgage lending, for simply doing good for ordinary Americans - has just been dealt by the government. A so-called “great compromise” has just laid $300 billion - financed by Fannie Mae and Freddie Mac - in bad debt at the footstep of the taxpayer. According to the Wall Street Journal:
The legislation combines the regulatory reforms for government-sponsored enterprises Fannie Mae and Freddie Mac with a proposal to use the Federal Housing Administration to offer up to $300 billion in federal guarantees to help refinance struggling borrowers into new mortgage loans.
One compromise proposal discussed last week would use the money from an affordable housing fund created from Fannie Mae’s and Freddie Mac’s earnings to help pay for the FHA guarantee program.
REALTORS’ Deal with the Devil
May 12, 2008
After recently taking REALTORS to task for advocating more “government backed mortgages” and looser credit limits as the way out for the real estate industry crisis, I thought perhaps I was too harsh on the industry. It’s possible that most REALTORS don’t realize that every time they argue for the government to subsidize un-credit-worthy taxpayers that they are really arguing that the government steal money from the existing homeowners - through taxation to bail out Fannie and Freddie everu so often. Maybe most REALTORS were just too shortsighted to understand that every increase in taxation hurts their future source of business - the future seller who becomes the future buyer. And since most REALTORS only last about 18 months in this business anyway, maybe most REALTORS really don’t care about this stuff, since they are only focused on where they can get a commission in the next 45 days.
Then, something frightening was quoted in the Wall Street Journal on Friday, May 9th, page A3 and I realized that the REALTORS have made the ultimate deal with the devil. In an article by Ruth Simon and Nick Timiraos entitled “Mortgage Firms Cool to Principal-Cut Plan,” no REALTORS are mentioned. There is a proposal by the U.S. House of Representatives that was passed this week that calls for:
…mortgage companies to reduce the principal on troubled loans. In exchange, the Federal Housing administration would pay off the current loan and issue the borrower a new FHA-backed mortgage.
Death Throes of the Old REALTOR Ways
May 6, 2008
How do you know when an industry is dying?
Simply look for the Luddites.
As in the 19th century, when technophobes sought to smash the emerging factories who were “taking their jobs, the the spectacle we have seen in the past few years across the REALTOR community is not much different, as it tries to use MLS rules to smash challengers to its Old Ways. That’s the only way to explain why the U.S. Department of Justice announced it was suing the Consolidated MLS of South Carolina for restraint of trade.
Regular readers of my columns know that I’m no fan of government interference in the economy. The free market is the best regulator of freely competing companies. Consumers, through free market mechanisms (choosing to purchase services or not) are quite capable of protecting themselves. And in cases of fraud, there are plenty of legal remedies that don’t require Uncle Sam’s preemptive strike. But in the case of the REALTOR Luddites versus the Industrialists, I’ve got to say: The DOJ has it right for a change.
The DOJ’s lawsuit is correct because the purpose of government is to protect one’s rights from harm from others. Consolidated MLS’s attempt to create artificial barriers to working with all consumers was exactly that: harming some people’s right to make a living (their right to life, exactly). Let’s look at the case.
The DOJ claims that Consolidated MLS was trying to impose “minimum standards rules” on their members. Essentially, the MLS was attempting to set a standard of performance for all members to practice “the same way” (at least same way minimally). The rules would impose subjective whims that abrogated the rights of some members to do business the way they see fit. And the only purpose of imposing these rules was to restrain the practice of some other members.
Essentially: One rival gang got control of the system and was using the rules to beat up on another gang. The “full (or more) service” brokers were preventing “less” or discount service brokers from participating in the marketplace.
According to the DOJ:
By providing an efficient means of exchanging information on home listings, MLSs can benefit consumers, but that same role makes access to the MLS database – and therefore MLS membership – critically important for any broker seeking to serve clients efficiently in the MLS’s service area, the Department said. Consequently, the rules adopted by CMLS governing who can be a member and how members must run their businesses have a significant impact on competition among brokers in the area served by the MLS.
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