It is assumed that the real estate industry is ripe for disruption. We see a new whiz-bang website just about every week that was developed by two guys in a garage who think they have the answer – but then are never heard from again.
The reason is advertising.
Zillow got to the top because they were spending $100 million per year to advertise. Anybody who is willing to spend that type of money can dance their way into the hearts of consumers.
Bigger players will be looming in 2017.
1. We talked about Opendoor, the flipping company who buys your house for cash in 3-7 days at a below-market price based on algorithms. Their fees range from 6% to 12%, which would only appeal to desperate sellers – which have been few and far between in San Diego. Opendoor is only operating in Dallas and Phoenix, so expanding to the tony coastal regions might take a while. But they just received $210 million in venture capital, and have 200 employees closing $60 million per month in transactions currently. They are expanding to 10 unnamed cities, and hope their fast money can attract a homeowner’s first phone call. But once sellers hear their (low) bottom-line, only a great salesman could convince them to not shop around.
2. Another big-money contender is Quicken Loans, the second-largest retail mortgage lender in the country. They just announced that they are acquiring a ‘technology platform’ to appeal to more home buyers directly. LINK
“Finding a reputable agent and a great home go hand-in-hand,” said Ron Frankel, OpenHouse Realty CEO. “I am confident that the work John Kvasnic, OpenHouse Realty’s Chief Product Officer, and his team have done in both arenas will help In-House Realty become the premier destination for those looking to work with the best agents in their community, while also helping them find the home of their dreams. It’s the perfect fit.”
They don’t mention that their recommended agents are paying Agent Ace a referral fee of 35% of their commission. There is a big difference between the ‘best agents in their community’, and ‘best agents in their community who are willing to pay a 35% referral fee’. The second group is much smaller, and typically they are the realtors who are getting outworked by the ‘best agents in the community’. But consumers won’t figure that out until it is too late.
Quicken Loans spent $21.1 million on Google advertising alone in 2014, more than any other mortgage lender. They could become a major player if they spend enough on advertising – they already spent it in the mortgage space, and are up to the #2 mortgage-lender nationwide (look for their Super Bowl ad).
3. The founder of Uber is another potential disrupter, but only because of their previous smashing success. Their real estate package follows the course of most outside disrupters who think transparency is something the sellers want – but they don’t.
When a seller receives a few good offers on a home, the sellers agent will ask for best and last offer by noon tomorrow, for example. If buyers were able to see the terms of all the other offers, as they would when using Haus, then this could drive the price of the home up as buyers enter into a bidding war. Not to mention, unethical sellers or agents could artificially inflate the price of a home through shill bidding, as an offer is not legally binding.
While Haus helps sellers measure the demand on their property, it might also drive away potential buyers who don’t want to get in a bidding war over an already-expensive purchase. Or, on the other side, this might short a seller who would have received a much higher best and final bid from a buyer, but saw that offer drop to barely beat the next-best offer.
Once sellers figure out that disruption/transparency may not be in their favor, selling the old-fashioned way where they hold all the cards will sound like a safer choice.
We already know that the industry is in retreat. The old-school realtors who think they deserve a five-figure paycheck for completing fill-in-the-blank contracts will think retirement sounds better than ever. Mid-range and better agents are scrambling to build teams and be Redfin-ish in their conveyor-belt approach, even though the pitfalls are obvious. It wouldn’t take much to tip the whole thing over at this point.
Zillow feels like an old friend by now, but who knows what they might do? Amazon or Google could jump in too, and if they did, look out.
Whoever spends the most advertising dollars, wins!
Here’s a look at the annual number of NSDCC listings – this year, we are going to exceed 5,000 for the first time in five years:
# of Listings
MSP YoY %diff
MLP – MSP
Additional inventory is encouraged….up to a point. In 2006, the inventory ballooned to 6,046 listings, which was 9% higher than the previous year’s count. The surge in new listings set buyers back on the their heels, and sales plunged 13% in 2006 compared to 2005.
Will 2017 be the year that the inventory sees a real surge?
A summary of the conditions leading into 2017:
Highest NSDCC prices ever.
Highest rates in two years.
Highest inventory since 2011.
Highest seller optimism ever (MLP – MSP).
Hopefully the Trump Effect will help buyers keep moving!
This year won’t be over soon enough for music legends!
George Michael’s ‘Faith’ won the Grammy of Album of the Year in 1989, sold over 100 million albums world-wide (only 24 artists/bands have done that) and had eight #1 hits on Billboard Hot 100 in the U.S. This is one of his best live performances on Youtube – can you imagine if he would have toured with Queen, a la Adam Lambert:
The Freddie Mercury Tribute Concert for AIDS Awareness was an open-air concert held on Easter Monday, 20 April 1992 at London’s Wembley Stadium, for an audience of 72.000. The concert was produced for television by Ray Burdis and broadcast live on television and radio to 76 countries around the world. The concert was a tribute to the life of the late Queen frontman, Freddie Mercury, with all proceeds going to AIDS research. The show marked bassist John Deacon’s final concert with Queen (save one live appearance with Brian May, Roger Taylor and Elton John in 1997). The profits from the concert were used to launch The Mercury Phoenix Trust AIDS charity organisation. The concert began with short sets from bands that were influenced by the music of Queen (including many hard rock and heavy metal bands), including Metallica, Extreme (playing a Queen medley), Def Leppard (who brought Brian May onstage for a faithful version of “Now I’m Here”), and Guns N’ Roses. Between bands, several video clips honouring Freddie Mercury were shown, while the roadies changed the stage for the following act’s performance. The second half of the concert featured the three remaining Queen members – John Deacon (on bass), Brian May (on guitar) and Roger Taylor (on drums) – along with guest singers and guitarists, including Elton John, Roger Daltrey (The Who), Tony Iommi (Black Sabbath), David Bowie, Mick Ronson (Spiders from Mars), James Hetfield (Metallica), George Michael, Seal, Paul Young, Annie Lennox, Lisa Stansfield, Robert Plant (Led Zeppelin), Joe Elliott and Phil Collen (Def Leppard), Axl Rose and Slash (Guns N’ Roses), Liza Minnelli, and others. U2 dedicated a live performance via satellite from Tacoma, WA of “Until the End of the World” to Mercury.
Newly widowed, Kay McCowen quit her job, sold her house, applied for Social Security and retired to Mexico. It was a move she and her husband, Mel, had discussed before he passed away in 2012.
“I wanted to find a place where I could afford to live off my Social Security,” she said. “The weather here is so perfect, and it’s a beautiful place.”
She is among a growing number of Americans who are retiring outside the United States. The number grew 17 percent between 2010 and 2015 and is expected to increase over the next 10 years as more baby boomers retire.
Just under 400,000 American retirees are now living abroad, according to the Social Security Administration. The countries they have chosen most often: Canada, Japan, Mexico, Germany and the United Kingdom.
Retirees most often cite the cost of living as the reason for moving elsewhere said Olivia S. Mitchell, director of the Pension Research Council at the University of Pennsylvania’s Wharton School.
“I think that many people retire when they are in good health and they are interested in stretching their dollars and seeing the world,” Mitchell said.
Two Santa Maria men have been charged with allegedly committing real estate fraud involving losses topping $500,000, the Santa Barbara County District Attorney’s Office said Thursday.
Angelo Gabriel Naemi, 36, was arrested for suspicion of five counts of grand theft by false pretenses, and one count of conspiracy to commit grand theft.
Steven Paul Gonzales, 61, was charged with one count of conspiracy to commit grand theft.
“The complaint alleges that Naemi, a real estate salesperson, and Gonzales, a real estate broker, conspired to falsify documents in association with numerous short sale transactions,” the District Attorney’s Office said. “Their actions allegedly resulted in a loss to Fannie Mae and Freddie Mac of over $500,000.”
The complaint also includes special allegations for aggravated white collar crime and excessive losses.
The District Attorney’s Office investigated this case in conjunction with the Federal Housing Finance Agency, Office of Inspector General, Los Angeles Field Office.
The allegations stem from deals spanning between 2012 and 2015 involving properties on the 1200 block of East Fesler Street and 1600 block of Chadwell Drive in Santa Maria, 800 block of West Fir Avenue in Lompoc, 300 block of Price Ranch Road in Los Alamos and the 500 block of Dawn Drive in Buellton.
Naemi’s bail is set at $395,000, and he is scheduled to appear for arraignment in a Santa Barbara County Superior Court in Santa Maria on Thursday while Gonzales is scheduled for Dec. 30.
Gonzales was never booked into the County Jail, according to the Santa Barbara County Sheriff’s Department, so no booking photo is available.
Gonzales became sole owner of CornerStone Real Estate in Santa Maria in 2012 while Naemi is listed as a sales associate with the firm.
In his biography on the business website, Gonzales is listed as “experienced in residential sales, short sales, income/commercial property sales, 1031 IRS tax deferred exchanges, business opportunities, commercial leases as well as new home construction.”
After working as an engineer for Hughes Aircraft, Gonzales has been involved in real estate since 1988, the website says.
On his own website, Naemi states he moved to the Central Coast in 2004 from San Diego and previously worked in the Wells Fargo mortgage department before becoming a licensed real estate agent.
At the rate our local Case-Shiller Index has been rising over the last few months, we will be looking at 2% to 3% appreciation per year – or less.
“Home prices and the economy are both enjoying robust numbers,” David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.
“However, mortgage interest rates rose in November and are expected to rise further as home prices continue to out-pace gains in wages and personal income.”
Blitzer noted that measures of home affordability—which are based on median incomes, housing prices and mortgage rates—have fallen by 20 percent to 30 percent since home prices hit a bottom in 2012. While consumer confidence is high and unemployment is low, home prices cannot keep rising faster than incomes and inflation, he said.
Here are the recent San Diego Non-Seasonally-Adjusted CSI changes:
The highest reading of the San Diego NSA CSI was 250.34 in November, 2005.
The last two weeks were impacted by rain, yet both had more new pendings than new listings! We are heading into 2017 with momentum, but that, and about $5 will get you a cup of coffee if sellers come out too optimistic.
The one NSDCC market that is guaranteed to be hot are the homes priced under $800,000. There are only 29 for sale today, the lowest reading EVER!
Click on the ‘Read More’ link below for the NSDCC active-inventory data:
As good as twitter gets right here: Meet the Chicago-area man behind the hilarious Super 70s Sports Twitter account: 'I poke fun. It's a little profane. But I think it's good-hearted' https://www.chicagotribune.com/sports/ct-spt-super-70s-sports-ricky-cobb-20190223-story.html
I am an active realtor working the street so most of the time the reality is stranger than fiction these days. But you could probably say that it's been like that since the beginning in 2005. Thanks for asking.
Extended to end of August now. There will never be a Covid foreclosure: FHFA extends forbearance period to 18 months - HousingWire https://www.housingwire.com/articles/fhfa-extends-forbearance-period-to-18-months/
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