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Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!

Jim Klinge
Cell/Text: (858) 997-3801
klingerealty@gmail.com
701 Palomar Airport Road, Suite 300
Carlsbad, CA 92011


Category Archive: ‘The Future’

I-buyer Advantage

Everyone is getting into the home-buying business.  First it was the well-funded disrupters like OpenDoor and Offerpad, and then Zillow, Redfin, Knock and others jumped in – which caused Coldwell Banker, Keller Williams to also announce their programs (plus Compass and others won’t be far behind).

What will the real estate world be like if sellers have multiple choices of cash buyers?  Which ibuyer will have the advantage?  Zillow is already in the driver’s seat, and they include the additional service of offering a third-party realtor’s opinion too.

From Mike DelPrete – an excerpt:

Zillow announced its Zillow Offers program in Phoenix earlier this year, and started buying houses in May. It is heavily promoting the program across its site. While looking in the Phoenix market, a prominent message is displayed on all active for sale listings.

In its latest quarterly results, Zillow revealed how effective the promotion was: “Since launch, we have received more than 10,000 offer requests from potential sellers.” And: “…in Phoenix, for example, we are seeing about 15% of all dollar value that’s being sold in Phoenix any given month.” That translates to about 1,600 offer requests per month.

Opendoor is on record saying that more than “one in two sellers who received an Opendoor offer” will accept it. It’s currently buying around 300 houses per month in Phoenix, so that’s about 600 offers made per month.

There’s a difference between an offer being requested, and an offer being made. What’s clear, though, is that Zillow is generating a massive amount of offer requests each month, at volumes that rival (and exceed) Opendoor.

Most importantly, Zillow’s leads are coming with zero incremental customer acquisition cost, while Opendoor and other iBuyers must advertise directly to consumers to generate leads.

They aren’t in San Diego yet, but it’s coming. Read Mike’s full article here:

http://www.mikedp.com/articles/2018/10/8/zillow-opendoor-and-controlling-the-consumer-journey

Posted by on Oct 8, 2018 in ibuyer, Jim's Take on the Market, The Future, Zillow | 0 comments

Compass

Today was our Compass Day.

We met our CEO, Robert Reffkin, and we were thoroughly impressed.

We come from different backgrounds – I’m the scrappy street guy, and he is the Wall Street wunderkind – but we see the future of real estate the same way.

He mingled for longer-than-necessary during the breakfast warm-up, and then spoke for about an hour on his vision of Compass, and creating a platform for top-producing agents to best serve their clients.  Then he hung around for another extended period during happy hour, shaking hands and making himself very available to agents and support staff alike. He exemplified leadership in the best way.

It is a contagious environment!

Since January, Compass has hired 210 top-producing agents in San Diego (when we signed two months ago, there were 160). Most importantly, there are also 54 full-time support staff, which is unheard of in typical real estate brokerages.

There will be some consolidation coming to the real estate industry, and eventually the consumers will have a choice between taking their chances with discount fees for minimal service or hiring top professionals to deliver superior service and results (Wal-Mart vs Nordstrom).

We’ll do a second post on this topic, which won’t include how old I feel. I was the only one wearing a tie, and black shoes.  This is a younger crowd!

Posted by on Oct 3, 2018 in Compass, Jim's Take on the Market, The Future | 9 comments

$400 Million x 2

The most fascinating thing about working for Compass is how many people ask about Compass (especially other agents).  I signed up primarily for the future potential, and where big money might lead us.

We got another sense of how big yesterday:

Compass, a real-estate marketplace startup, raised $400 million in an investment round that will bring the company closer to an eventual initial public offering.

After the investment, the New York-based company will have a $4.4 billion valuation, a person familiar with the matter said. The financing will help Compass expand its real-estate technology into more cities, including outside the U.S., the firm said in a statement.

The Softbank Vision Fund and Qatar Investment Authority are leading the round, Compass said.  The company expects growth in 2018 to double to almost $1 billion in revenue, according to the person, who asked not to be identified because the information is confidential. Compass makes its money by taking a small cut of each transaction coordinated by its real-estate agents. The company said it’s on track to post more than $34 billion in sales volume this year.

“We will continue to capitalize on our momentum nationally and internationally,” said Ori Allon, the company’s co-founder and executive chairman.

The latest funding brings the total raised by Compass to $1.2 billion. Besides international expansion, Compass is seeking to enter related businesses beyond property listings, such as mortgage title transfer and moving, CEO Robert Reffkin said in a June interview.

“What books were for Amazon, the brokerage model is for us,” Reffkin said at the time.

Link to Bloomberg Article

On the same day, the same bank announced the same for OpenDoor:

Growing direct homebuyer Opendoor now has $3 billion in financial backing (yes, that’s “billion” with a “b”) thanks to a sizable new investment from Japanese technology company SoftBank Group.

Opendoor announced Thursday that it secured a $400 million investment from SoftBank Vision Fund, SoftBank’s investment arm.

That investment pushes Opendoor’s total equity capital raised above $1 billion – $1.045 billion, to be exact.

In addition, Opendoor said Thursday that it also recently secured $2 billion in debt financing from unnamed “top banks,” meaning the growing company now has more than $3 billion in total funding since it first began buying and selling houses in Phoenix and Dallas-Fort Worth in 2014.

Since then, Opendoor has been growing by leaps and bounds and raising money hand over fist.

Opendoor is now operating in nearly 20 markets, including Atlanta, Charlotte, Dallas-Fort Worth, Las Vegas, Nashville, Orlando, Phoenix, Raleigh-Durham, Tampa, and San Antonio, and has plans to into California, the Pacific Northwest, and several other areas over the next few months.

Opendoor’s next market expansions will be in Sacramento, California; Riverside, California; Denver, Colorado; Portland, Oregon; Austin, Texas; and Jacksonville, Florida.

And the company plans to be operating in 50 markets by 2020.

Link to Article

It looks like the future of real estate sales will be determined by how these big-money players spend their dough!

Posted by on Sep 28, 2018 in Compass, Jim's Take on the Market, Realtor, The Future | 2 comments

Open Chaos

Opendoor, the ibuyer who purchases your home for cash and closes escrow at your leisure (as long as you don’t mind paying their 6% to 13% fees plus home repairs) has made a deal to acquire a discount brokerage:

Opendoor announced Tuesday morning that it has acquired Open Listings, a real estate site that offers homebuyers a 50% refund on the fees their real estate agent would have received.

With the acquisition, Opendoor will now be able to buy a home directly from a seller, then help that seller find a new home (whether it’s a newly built home or an existing one), offer them a mortgage, and close on the sales through its own title operations.

Basically, buyers who use Open Listings find, tour, and buy homes through the platform. Real estate agents only come into the process when it’s time to make an offer on the home.

Link to Article

They are building a platform similar to the Red team’s, and both are weak in the beginning – they both offer inexperienced agents or no help at all at the initial showing of the home.  These guys expect you to go to the listing agent’s open house, and then make an offer with their online agent.

I believe that every buyer should receive professional advice from their agent while at the property – and reflect those details into the offer price.  Otherwise, you pay too much!

The online agents haven’t seen the house in person, and can’t offer the same expertise.  Besides, if you are an online agent, you just want to hurry up and write the offer and expect any defects to come out during the home inspection.  The buyers end up basing their entire investigation on a $500 guy who has no fiduciary duty to them and whose job is limited to the moving parts of the house.

But let’s say you can live with that.

These types of disrupter platforms are entirely dependent upon all agents sharing their listings on the MLS.  But as the major brokerages continue to input their listings on their company website first (Redfin’s publicly-stated policy), the MLS will soon become a relic, and the marketplace of last resort.

All of the market conditions are pushing in this direction.  We are transitioning from the Wild, Wild West to Full-Tilt Chaos!

Get Good Help!

Posted by on Sep 12, 2018 in ibuyer, Jim's Take on the Market, Listing Agent Practices, Realtor, The Future | 1 comment

How Far We’ve Come

Hat tip to my father-in-law who sent this in – he wasn’t around then!

  • What a difference a century makes! Here are some statistics for 1918:
    • The average life expectancy for men was 47 years.
    • Fuel for cars was sold in drug stores only.
    • Only 14 percent of the homes had a bathtub.
    • Only 8 percent of the homes had a telephone.
    • The maximum speed limit in most cities was 10 mph.
    • The tallest structure in the world was the Eiffel Tower.
    • The average US wage in 1910 was 22 cents per hour.
    • The average US worker made between $200 and $400 per year.
    • A competent accountant could expect to earn $2000 per year.
    • A dentist $2,500 per year.
    • A veterinarian between $1,500 and $4,000 per year.
    • And, a mechanical engineer about $5,000 per year.
    • More than 95 percent of all births took place at home.
    • Ninety percent of all Doctors had NO COLLEGE EDUCATION!
    • Instead, they attended so-called medical schools, many of which were condemned in the press AND the government as “substandard.”
    • Sugar cost four cents a pound.
    • Eggs were fourteen cents a dozen.
    • Coffee was fifteen cents a pound.
    • Most women only washed their hair once a month, and, used Borax or egg yolks for shampoo.
    • Canada passed a law that prohibited poor people from entering into their country for any reason.
    • The Five leading causes of death were:
      • 1. Pneumonia and influenza.
      •   2. Tuberculosis
      •   3. Diarrhea
      •   4. Heart disease
      •   5. Stroke
    • The American flag had 45 stars.
    • The population of Las Vegas, Nevada was only 30.
    • Crossword puzzles, canned beer, and iced tea hadn’t been invented yet.
    • There was neither a Mother’s Day nor a Father’s Day.
    • Two out of every 10 adults couldn’t read or write.
    • And, only 6 percent of all Americans had graduated from high school.
    • Marijuana, heroin, and morphine were all available over the counter at local corner drugstores.  Back then pharmacists said, “Heroin clears the complexion, gives buoyancy to the mind, regulates the stomach, bowels, and is, in fact, a perfect guardian of health!”
    • Eighteen percent of households had at least one full-time servant or domestic help.
    • There were about 230 reported murders in the ENTIRE U.S.A.!

Posted by on Sep 7, 2018 in Jim's Take on the Market, The Future | 6 comments

Uber Real Estate

Uber Real Estate is not affiliated with the real Uber:

SAN FRANCISCOSept. 4, 2018 /PRNewswire/ — Uber Real Estate has announced the launch of Uber Real Estate services. Uber Real Estate is disrupting the traditional real estate brokerage brick and mortar business model by reducing the transaction cost by up to 50 percent using their unique on-demand model.

“You will never again pay a full commission using Uber Real Estate. We take the Jack Ma and Steve Jobs approach to business and supply the consumer with what they want. We will make Uber Real Estate the premium service it should be, provide the ultimate value and market liquidity. This is for the people,” says Brent Ritz, Chairman of Uber Real Estate.

Consumers receive Uber – Like Execution with only experienced professionals, no more drama and only substantive yes or no, answers. Uber Real Estate provides Broker and Broker Attorneys with ten to thirty years of experience to the company’s clients. Associates have equity participation based on performance metrics. They have assets, skin in the game and perfect records. They are part owners of their firm and consequently, do not compete against others at their own firm. They actually do provide agency and work for the clients of the company as it should be.

“People are completely sick of fees and the boring drama of under-educated inexperienced Realtor cheerleaders. Uber Real Estate provides superior service with the unnecessary overhead, inefficiencies and bureaucracy removed. Uber Real Estate is the much-needed disruption in the Real Estate space.”

“Consumers just want to go online and get it done with Uber – Like Execution. Presently we are completely website driven. An Uber, mobile application, for Real Estate, is under development.”

Uber Real Estate was registered in 2009. Uber Real Estate owns the Trademark, for the word, Uber, itself, for Real Estate.

Link to Article

Posted by on Sep 6, 2018 in Jim's Take on the Market, Realtor, The Future | 5 comments

More Boomers In Debt

Will the current turbulence in the real estate market make boomers drop everything and list their home for sale in the coming months, or just scoot a little closer to the exits?

How many were already counting on every dollar of equity based on their lofty estimates of value that are now in question?  Do they pack it up and wait for a few more years?  Or sell now while they can?

The pressure is coming from many angles too – if it was just up to boomers having to survive on their own, they’d be fine, even if they had to cut back on the current lifestyle.  It’s their parents needing the expensive assisted-living and the kids trying to get ahead that puts the additional strain on boomers, and could make them sell their house.

It’s a curious topic for those around housing – how will it all play out?

These charts and graphs are from this story in the WSJ:

https://www.wsj.com/articles/a-generation-of-americans-is-entering-old-age-the-least-prepared-in-decades-1529676033

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


•The percentage of families with any debt headed by people 55 or older has risen steadily for more than two decades, to 68% in 2016 from 54% in 1992, according to the Employee Benefit Research Institute, a nonpartisan public-policy research nonprofit.

•Americans aged 60 through 69 had about $2 trillion in debt in 2017, an 11% increase per capita from 2004, according to New York Federal Reserve data adjusted for inflation. They had $168 billion in outstanding car loans in 2017, 25% more per capita than in 2004. They had more than six times as much student-loan debt in 2017 than they did in 2004, Fed data show.

A combination of economic and demographic forces have left older Americans with bigger bills and less money to pay them.

Tempted by a prolonged era of low interest rates, boomers piled on debt to cope with rising home, health-care and college costs. Interest-rate declines hurt their security blankets. Lower earnings on bonds prompted many insurance firms to increase premiums for the universal-life and long-term-care insurance many Americans bought to help pay expenses. Some public-sector workers are living with uncertainty as cash-strapped governments consider pension cuts.

Gains in life expectancy, combined with the soaring price of education, have left people in their 50s and 60s supporting adult children and older relatives. Some are likely to have to rely on professional caregivers, who are in short supply and are more expensive than informal arrangements of the past.

Read full article here:

Link to WSJ Full Article

Posted by on Aug 29, 2018 in Boomer Liquidations, Boomers, Jim's Take on the Market, The Future | 0 comments

Virtual Real Estate

Hat tip to Rick for sending in this incredible VR – I need to broker these!

Investors are spending real money to buy land in a new city that only exists in virtual reality. Buyers can build whatever they want on their plots in Decentraland. Many hope to make a profit trading goods and services in the virtual world’s own crypto currency. But will Decentraland be an online utopia or a cyber slum?

Posted by on Aug 28, 2018 in Jim's Take on the Market, Realtor, The Future | 1 comment

Car Living

We’re going to see more of this – from the unfortunate ones to those who deliberately choose to live a life untethered.

Each night at 6 p.m., San Diego’s New Life Assembly church opens its parking lot to dozens of people who will spend the night in their cars. The church is one of three sites in the city where the homeless can park overnight without fear of being ticketed or towed—or worse. It’s part of a citywide safe parking program started in 2010 to confront an increasingly visible face of the state’s homelessness epidemic: Californians sleeping in their cars.

As housing costs soar in major cities, more Americans are living behind the wheel. The U.S. Department of Housing and Urban Development doesn’t collect national data on vehicle residency, but unsheltered homelessness—a category that includes people sleeping in vehicles—is on the rise.

In 2016, HUD counted 176,357 unsheltered people nationwide on a single night; last year, that number jumped to 192,875. In King County, Washington (which includes Seattle), about 3,372 people—more than half of the county’s unsheltered population—are living in vehicles. And in Greater Los Angeles, which has the largest unsheltered homeless population in the country, more than 15,000 people live in cars, vans, and RVs.

The car has become “a new form of affordable housing,” says Graham Pruss, a researcher and former outreach worker for Seattle’s Road to Housing program, a city initiative that helped residents living in cars find more stable housing.

In the tight housing markets of West Coast cities, it’s not just the destitute or the unemployed who see their cars as their best option. “I have met people who are working at Amazon and rent an RV to live on the streets of Seattle while they’re saving enough to get into their own place,” Pruss said.

After years of crackdowns, cities from Santa Barbara, California, to Kirkland, Washington, are trying a new strategy: safe parking programs.

San Diego’s program, run by the nonprofit Dreams for Change, has three lots with 150 spaces. The program has 325 residents—more than two people share a car, in some cases—ranging from families to retirees to tech workers making nearly $100,000 a year. And they sleep in models ranging from a Honda Civic to a Lexus. “Most of the time you walk through the parking lot, you wouldn’t know that they are a parking lot full of individuals living in their cars,” said Teresa Smith, CEO of Dreams for Change.

http://www.dreamsforchange.org/the-safe-parking-program/

Link to Article

Posted by on Aug 22, 2018 in Jim's Take on the Market, The Future | 11 comments