There has been a movement within the industry to create a broker-owned MLS to compete with Zillow/Trulia. I’m not sure they see it as competing with Zillow/Trulia – but that will be the eventual contest, unless they can co-exist.
The cost to create and maintain such a website is one issue. But the other is the advertising of other agents on my listings. Unlike Zillow, the new National Broker MLS website will only allow the listing agents to be displayed on each listing – see the discussion here:
Whether the big brokerages recognize it or not, buyer representation is being elbowed out, and we are barreling towards single agency.
Eventually there will just be the big listing teams that dominate the portals, and buyer inquiries directed to the in-house ‘buyer agents’. But with those being mostly newer agents who work for the listing agent, there won’t be much actual ‘representation’ delivered to the buyer.
Buyers will be instructed to pay the seller’s price, or hit the road. The end result isn’t much different than it is now, with so many sellers today willing to wait for their price.
With less-rigorous pricing and agents pulling for the sellers only, buyers will be left to their own devices. Will the National MLS, Zillow, HGTV, or other sources give buyers enough to be comfortable without representation? Probably, because buyers don’t know what they don’t know.
Zillow and the other portals are helping to take the place of real buyer agents. As a result, buyers will just hunt for houses that make them feel good, confirm online that the price is within a reasonable distance of the last comp, and place their order with the listing team.
The environment will favor the flippers, and anyone else who pours fix-up money into their house before selling. How many times do you see a flipper or a turn-key property get an extra bump in price just because they look so good? It happens a lot today, and it should keep going in that direction.
In the meantime, the buyers will be under-represented, if at all.
A tour of my new Los Reyes listing on the westside of San Marcos, and adjacent to Carlsbad’s Rancho Carrillo where houses have been closing at an average of $291/sf over the last 90 days – and we’re only asking $215/sf! Both in the same school district too!
The Zestimate is $818,573, and we’re only asking $769,000:
The January reading for San Diego was +0.71%, and we almost matched it in February with a +0.72% increase. The year-over-year change was +4.7%.
Downer Dave said,
“Home prices continue to rise and outpace both inflation and wage gains,” said David M. Blitzer. “The S&P/Case-Shiller National Index has seen 34 consecutive months with positive year-over-year gains; all 20 cities have shown year-over-year gains every month since the end of 2012. While prices are certainly rebounding, only two cities – Denver and Dallas – have surpassed their housing boom peaks.
“A better sense of where home prices are can be seen by starting in January 2000, before the housing boom accelerated, and looking at real or inflation adjusted numbers. Based on the S&P/Case-Shiller National Home Price Index, prices rose 66.8% before adjusting for inflation from January 2000 to February 2015; adjusted for inflation, this is 27.9%, or a 1.7% annual rate.
The highest price gain over the last 15 years was in Los Angeles with a 4.3% real annual rate; the lowest was Detroit with a -3.6% real annual rate (San Diego is +4.12%). While nationally, prices are recovering, new construction of single family homes remains very weak despite low vacancy rates among both renters and owner-occupied homes.”
The S&P/Case-Shiller’s 20-City Composite gained 5 percent year-over-year in February, compared with a 4.5 percent increase in January.
Denver led the gains with a 10-percent increase in home prices in the last 12 months, marking the first double-digit gain for the city since August 2013. San Francisco, where values appreciated 9.8 percent from February 2014, saw the largest acceleration in prices.
Only San Diego, Las Vegas, and Portland saw the pace of increases slow from the previous year.
This chart of annual changes shows how the frenzy has tapered off since 2013:
The Inventory Watch should be where we’ll see any indicators of market trouble. But today’s inventory is 6% less than a year ago, with only the $800,000 – $1,400,000 category higher (244 vs 240 listings).
A growing inventory would mean sales are slowing, but we’re selling more houses this year than last year. In the first four months of 2014, we sold 838 NSDCC houses, and we’ve already closed 824 this year with four days to go plus late-reporters!
The 2015 average cost-per-sf is higher too: $432/sf vs. $415/sf last year.
Click on the link below for the complete NSDCC active-inventory data:
The phrase ‘TDS Exempt’ is seen in listing remarks – what does it mean?
TDS stands for Transfer Disclosure Statement, which is our regular form used by sellers to disclose everything they know about the property and neighborhood.
The most common example of who might be exempt from using the form are sellers who have inherited the property. The common belief is that those sellers are exempt from disclosing, but that is not true.
All sellers are required to disclose anything they know about the property. If they happen to be TDS Exempt, it only means they don’t have to use the form.
It doesn’t make much sense, but it is, what it is.
The form does ask probing questions to jog the memory and elicit a response, so all sellers should review it and decide if they have anything to disclose.
Agents are never exempt from disclosing what they know, or what they would find during a normal visual inspection.
Realtors aren’t known for being longheaded – they just do what they see everyone else doing. In an industry that is virtually unregulated and has no leaders, we are left with a full assortment of real estate practices – AKA the wild, wild west.
Recently, a client called me about a house that had a ‘Coming Soon’ sign in front. I called the phone number on the sign, and of course had to leave a message. The listing agent did call back, and said that the home wasn’t able to be seen for two weeks.
I called my potential buyers back, and here’s what we covered:
1. We googled the address, hoping the agent would have uploaded the listing with vivid new photos to Zillow, or perhaps we’d find it on the company website. But no new listing was found.
I checked the address in the MLS, and found that it had been sold just a few short years ago – and previous photos were still available. They were the typical photos, done with an instamatic camera on a dark day with lights off. The photos mostly featured bedding fashions from 15-20 years ago.
My buyers’ initial enthusiasm started to fade.
2. We then hit Google Maps to gather as much intel as we could from the sky. But as usual in tract neighborhoods, it looked like there wasn’t much yard, and neighbors were close by and imposing. By now, I could hear their high hopes flying out the window.
3. The new list price seemed to be in line, but, as usual, our conversation steered to the six-figure gain above what the sellers paid for it. Did they do any major improvements to warrant such a jackpot?
If the price is the same as others nearby, chances are that no improvements were made – otherwise the sellers would insist on pricing higher than everyone else. So we came to another logical conclusion – in two weeks we are going to see virtually the same house as when the sellers bought it, at the higher price.
4. Annoyed and disappointed, we wondered why an agent would be so casual about throwing out a ‘Coming Soon’ sign. The frustration in the marketplace turns people into skeptics quickly, and the obvious conclusion was that the agent’s intent was to find their own buyer, and double-end the commission.
The end result? My motivated buyers talked themselves right out of buying this house. We’ll probably check it out eventually, but we already expect to find an original-looking house with small yard surrounded by neighboring houses being offered by greedy sellers and an agent we don’t know if we can trust.
Buyers prefer to see a house right away, but are used to having to wait a bit. Thus, the Coming Soon sign should go up 1-2 days before showings commence, not two weeks – all that does is encourage buyers to forget about it.
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