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Category Archive: ‘Market Buzz’

Real Estate Tech


Venture capital is pouring into real estate, looking for the next big disruption:

An excerpt:

Many real-estate-tech companies that got into the business early hoped to knock out brokers in both residential and commercial real estate, an ill-fated strategy. The brokerage business has been surprisingly resilient, panelists said.

That is partly because tech firms haven’t been able to replicate the hand-holding that buyers and renters need when deciding where to live or work. “The people who are thinking this is another one of those transactions with a middleman that needs to go away are foolish,” Mr. Svrluga said. “Love your agent.”

But that doesn’t mean the brokerage business isn’t going to change. Panelists predicted that technology and data tools will radically alter the way brokers deal with customers.

“The reason there’s a graveyard of technology companies in real estate is they try to disrupt just to disrupt,” said Robert Reffkin, chief executive of Compass, a technology-driven real-estate brokerage. “Just make it better.”

Posted by on Oct 19, 2015 in Jim's Take on the Market, Market Buzz | 2 comments

Live Home Tours

There are new gadgets for real estate coming at us every day, but this one has some promise if it can live-stream without interruptions.  From FT:

Have you ever given a client a tour using FaceTime or other video chat app? The results can be frustrating when it freezes mid-frame or the client doesn’t answer your video chat — even though you have arranged your schedule to show them the property.

RealLync offers a solution, and some extra features to go along with it.

RealLync is a virtual home tour app. Its features include the ability to:

  • pre-record a home tour;
  • stream a live home tour with individual clients;
  • stream a virtual “open house” where you provide tours to multiple clients at once;
  • search for potential clients who are signed up on RealLync;
  • send tour invitations, including links to the tour;
  • create a property profile;
  • create a RealLync agent profile; and
  • chat and send messages with clients via RealLync.

For pre-recorded videos, agents can add notes and commentary to the presentation that pop up during the tour, giving this app an edge in terms of increasing the production value of your videos. This is a particularly helpful feature when a client has to cancel their live tour, as you can record the full tour and include helpful commentary for them to view later. Or, if you are the seller’s agent, you can link to the recorded tour on the listing site, providing prospective buyers an attractive and dynamic way of becoming more familiar with the property.

Posted by on Sep 10, 2015 in Jim's Take on the Market, Listing Agent Practices, Market Buzz, The Future | 0 comments

Chinese Buying to Accelerate?


Excerpted from an article in BI:

Chang’s client is one of the group of wealthy Chinese caught in between a rock and a hard place: Leave their assets in China to potentially weather additional market volatility and yuan devaluations — or put it in real estate that is now more expensive than just a few weeks earlier.

“Lots of my clients have been hit heavily by the equity market,” Chang, who was once a vice president at HSBC’s private bank, told Business Insider through a series of interviews. “But that only makes them more determined to diversify out of China.”

The chaos of the past few weeks is likely to lead to an acceleration in the rate of real-estate purchases by wealthy Chinese buyers in the US and elsewhere.

Chinese individuals are also being actively encouraged to buy abroad by the government.

Thus far, Chinese individuals have been allowed to convert $50,000 into other currencies annually — though there are ways to skirt the regulation.

That is about to change, with the Chinese government readying the launch of the Qualified Domestic Individual Investor program.

The QDII2 is an overseas-investment scheme that would allow Chinese citizens to invest overseas directly. Those with at least $160,000 in financial assets qualify.

The program is likely to launch this year and will bolster overseas real-estate purchases on the part of the Chinese.

“With QDII2 in mind, within five years we might look back and think of the current levels of Chinese cross-border investment as quaint,” Andrew Taylor, co-CEO of, a website that helps Chinese to buy properties abroad.

Read full article here:


Posted by on Aug 30, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions, Real Estate Investing | 0 comments

Love Letter Deluxe

An excerpt from Quartz:

Balog has seen what she calls “love letters” written from buyers to sellers since she started in the business 15 years ago. But in the tech savvy environment, letters might not be enough anymore. In fact, her clients John and Kate Fenwick who work for Google and Liftopia, decided to set themselves apart by making a video. Well, they made the video, but their dog Cooper does the talking.

Posted by on Aug 26, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions, Thinking of Buying? | 4 comments

Frenzy vs. Frenzy Sales Overlay

Every day we hear some pundit talking about the latest real estate bubble forming.  Can we learn anything from comparing recent sales to those during the bubblicious 2004-2007 era?

graph (56)

Sales were dropping precipitously in 2005 and 2006 after the 2003-2004 run-up.  There was one last blowout at the end of 2006 and into 2007 when Countrywide began pushing the no-doc, 100% financing up to $1,500,000.

When Angelo took away the punch bowl in the middle of 2007, the party was over – you can see how sales tanked, beginning in August, 2007.

One big difference when comparing these two eras is that the neg-am teaser rate in 2007 is today’s 30-year fixed rate.  When the teaser rate went away, and people had to qualify again, the market collapsed.

It doesn’t look that way today.

This year, sales have been strong, in spite of the San Diego Case-Shiller Index rising 42% since January, 2012.  If we hit an unsustainable stretch, the first indicator will be sales dropping off, like they did at the end of 2007.

Posted by on Aug 22, 2015 in Bubble-Era Pricing, Frenzy, Jim's Take on the Market, Market Buzz, North County Coastal, Thinking of Buying?, Thinking of Selling? | 4 comments

‘Housing Shortage’

Realtor Conference Lawrence Yun 007

From the WSJ:

WASHINGTON—Sales of existing homes climbed in July to their prerecession pace, but low inventory and higher prices threaten to curtail those gains heading into the fall.

Existing-home sales rose 2% last month from June to a seasonally adjusted rate of 5.59 million, the National Association of Realtors said Thursday. Last month’s sales pace was the highest since February 2007 and 10.3% higher than a year earlier.

Despite relatively steady gains in home sales in the past year, thinning supply and high prices loom as headwinds that could slow the recovery. As well, mortgage rates could be poised to rise when the Federal Reserve raises short-term interest rates, potentially as soon as next month.

Total housing inventory fell 0.4% at the end of July to 2.24 million existing homes available for sale, 4.7% lower than a year ago. At the current pace of sales it would take 4.8 months to exhaust the supply of homes on the market, down from 5.6 months a year ago, the NAR said Thursday.

Jim Klinge, a real-estate agent in San Diego, said inventory is low in his area because residents are reluctant to move to another town or state. In prior years, high prices would encourage some people to sell and leave town, he said.

He said every new listing generates intense interest from buyers, such as a three-bedroom home he listed Saturday night at $579,000 for which he had already received 30 queries by Thursday.

“We have to recognize that we have a broad-based housing shortage,” said Lawrence Yun, the NAR’s chief economist. “Home builders have been essentially out of the game or underproducing” since the crash.

The median sale price for a previously owned home slipped slightly to $234,000 from June’s $236,300, but is still 5.6% higher than a year earlier. July’s prices mark the 41st straight month of year-over-year price gains.

Posted by on Aug 21, 2015 in About the author, Jim's Take on the Market, Market Buzz, Market Conditions | 1 comment

Bubble Talk


This is what you get when a college professor looks at today’s real estate market – faulty assumptions.  1) The graph he included shows the two years (2012-2013) of rapid appreciation; and 2) the building-permit numbers are skewed by the lack of land available, plus 3) rapidly rising rents help to reduce the home-price-to-rent ratio.

From the

If history is any guide, the L.A. housing price cycle seems to last about 12 years on average, of which seven years is spent in the bull market with at least 65% real price appreciation, and five years is spent in the bear market. We are three years into the housing recovery that started in 2012, with 27% appreciation so far. On average, there will be four more years or 38% more price growth before we reach the turning point.

Of course, it’s possible the bear market could come earlier or later than four years, but that is quite unlikely to happen in the very near future.

How can I be so sure? Often, during a bubble-making period, we see an accelerating rate of home price appreciation, as in 1988-89 and 2004-06. In the last two years, we haven’t seen that kind of rapid appreciation in Los Angeles.

Another way to understand housing price cycles is by looking at building permit numbers. Speaking roughly, if developers are investing in new properties, that’s a good sign that demand, and prices, are rising or keeping steady. If developers are holding back, that suggests demand, and prices, will soon fall.

L.A. housing permit units peaked in 1977, 1988 (50,500 units) and 2004 (26,900 units), one to three years ahead of the real housing price peaks in 1980, 1989 and 2006. Permits bottomed in 1982, 1993 (7,300 units) and 2009 (5,700 units), a few years before the housing price troughs in 1984, 1997 and 2012.

Over the last three years, we have seen L.A. building permits increase from 11,200 units in 2012 to 18,200 units in 2014. The 2015 number will most likely be higher than 2014. Therefore, we can predict the next home price peak is at least two years away.

Yet another measure of rational housing value is a simple price-to-rent ratio. The ratio is calculated by taking the median home price over the annual median rent in L.A. If the ratio is high — meaning that home prices are beyond their fundamental value based on expected rental revenues — that points to a bubble. Again, let’s look at history.

Two previous peaks were in December 1989, with a ratio of 14.8 to 1, and in February 2006, with a ratio of 24.4. According to Zillow, the current price-to-rent ratio in L.A. was 17.1 in May, which is far below the 2006 bubble level but still higher than any time before 2003.

That doesn’t worry me, though. A high ratio doesn’t spell danger for Los Angeles because, similar to New York (ratio: Manhattan 25, Brooklyn 23) and San Francisco (ratio: 21), it’s now a “superstar” city. L.A.’s size, amenities, weather and geography make its houses an investment target for the global elite. Wealthy individuals from all over the world don’t care that it might make more financial sense to rent, because they’re not simply buying Los Angeles houses to live in them, they’re also trying to diversify their financial portfolios.

Even though Los Angeles is one of the least affordable cities in the U.S., all factors indicate that it is not in a housing bubble. Of course the bull market will end eventually, but that doesn’t mean we’re heading for a devastating crash, like in 1990 or 2007. Whether you should put up a million bucks for that bungalow is another story.

Posted by on Aug 20, 2015 in Forecasts, Jim's Take on the Market, Market Buzz, Market Conditions | 2 comments

Chinese Home-Buying Concerns


From John Burns Real Estate Consulting, a company that is very thorough in their research:

I live and work in Irvine, California, which many consider to be ground zero for Chinese new home investment in the United States. In addition to everything else great about living in America, Irvine has fantastic schools, many new homes (Chinese have a huge preference for new over resale), a very well established Chinese culture, and is within one hour of Los Angeles International Airport. Some of the new home communities we have worked on in Irvine have sold more than half of their homes to Chinese buyers, and I am being conservative here. Prices often exceed $1 million, and frequently there is no mortgage.

Chinese interest in US housing is not confined to California, as our consulting team has noticed Chinese home buying in areas served by all of the major airport hubs. In South Florida, agents have been flying directly to China to compensate for declining demand from South America.

While the recent Chinese stock market correction has caused a decline in sales (one of my builder clients has noticed a sharp pullback, another just told me about a home sale cancellation specifically due to the buyer’s stock market losses, and one publicly traded home builder even mentioned the pullback on their earnings call.), our research has convinced us of tremendous Chinese demand to buy US real estate for their families and as investments.

Nonetheless, we remain very uncertain about the level of future Chinese home buying:

1.  Is the number of people who can no longer afford to purchase a home after the stock market correction and currency devaluation greater or less than the number of people who will be encouraged to buy here by the stock market and currency instability?

2.  How real is the economic growth, and is there underlying debt (as reported by the Wall Street Journal in December) that could cause Chinese wealth to unravel?

3.  Will the government lift the $50,000 annual overseas investment cap later this year as anticipated, which could cause a flood of Chinese investment in US housing?

We don’t know the answer to any of these questions, but the future success of many new home communities depends on the answer. If you have some particular insight based on your knowledge of China, please let us know. We are constantly in search of new and better information.

Full article here:

Posted by on Aug 19, 2015 in Jim's Take on the Market, Market Buzz, Market Conditions | 13 comments

Realtor Transparency


I am a fan of transparency.

The two best attempts of creating an agent-ranking website got shot down by realtors themselves.  But outside entrepreneurs keep plugging away, and one of them could find the right mix and hit the jackpot some day.

One website called has agent data. To see what they presented, I looked up my own name.  They don’t go into details of where they found this data, or how to interpret this data.  No time periods are given either:

Jim the Realtor stats

Realtors complained about accuracy, but this is what we get instead – outsiders who are running an agent-referral business and using our names and numbers for eyeball bait.  They hope you’ll inquire about an agent, submit your contact info, and then they will send you two other agents who are paying them a referral fee of 25% to 30%.

I don’t know where this company gets their data.  I’ve sold around 32 homes within the city limits of San Diego, but did they get that straight from the MLS? A title company?

The average days-on-market should only be for listings sold – unless a longer average means the agent’s buyers are waiting out the sellers more effectively. On the MLS, my average days-on-market with sellers is 29 days, and buyer sales average 50 days so I don’t know where they got the 64.

Who knows about the 177.  I have more than that on my Zillow count but they may have taken their number from a few years ago?  BTW, Zillow finally corrected their sales counts.  Each agent has their sales tally on their Zillow page, but Zillow’s 12-month timer must have broke because recently they had displayed my count for the last 17-18 months.  I doubt any agents complained!  It is back to the 12-month count now.

Two broker-generated listing portals are being developed currently, and they should include agent statistics right off their MLS.  They will have the accurate data at their fingertips, so let’s create a depository of identical stats on each agent so the public can educate themselves.

Would it favor the old veterans who have more stats?

It might impress the analytical people who crave data, but consumers should be willing to consider the whole package. If photos and video were included in each agent page, any realtor could create a compelling case on why people should use them.

If agents don’t develop our own website, others like Zillow will keep doing it for us.  Or we’ll leave it the way it is now, with agents being able to say whatever they want about themselves because there’s no public way to verify.

Recently an agent mailed out a fancy brochure about being a rural-property specialist.  But a simple MLS search of her sales revealed that she had never sold a rural property. She said she had 15 years experience, but she got her license four years ago.  I guess she could have been an assistant, or sold in another state, but if you haven’t sold one here yourself in the last four years, then you aren’t a specialist.  Yet many agents get away with it because there’s no transparency.

Let’s provide a simple and identical set of data on every agent, and give explanations on how to interpret them.

These are my 16 listings sold over the last 12 months:

JtR stats

Possible interpretations by consumers:

1.  He only sold 16 listings in the last 12 months?

The blog drove a lot of buyers my way during the downturn, and I’ve been scrambling to generate organic listings since the REO listings dried up.

2. He sells them too fast.

Sellers who think it should take months to sell a house will think I’m giving them away.  But it is more a reflection of pricing accuracy and a hot market.

3. He doesn’t work my price range.

4. He doesn’t work my area.

5. He doesn’t sell my size of house.

6. He’s too busy. (I’ve sold twice this many)

7. He’s not busy enough.

8. He only works with sellers (I closed 17 buyer sales).

If each agent inputted their own explanations, they could add texture to their stats, and make their case why they should be hired.  Include a video presentation too (Zillow does).

Consumers would be making educated decisions, and we as agents should not only applaud that, we should insist on it.  Agents would have to get better at selling themselves, and those that do would get the business, regardless of experience or sales history.

I am uncomfortable displaying my stats – people are prone to poke holes and find faults.  It’s why realtors don’t want data released!  But we should all get used to our sales histories being public, because one way or another it is happening – with or without us. Let’s make the best of it!

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Posted by on Aug 17, 2015 in Jim's Buyer Representation, Jim's Take on the Market, Listing Agent Practices, Market Buzz, Realtor, Realtor Training, Realtors Talking Shop, The Future, Why You Should List With Jim | 5 comments