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Meeting of the Mind Camp April 30, 2006

Wow!

I just returned from MindCamp2.0… and am now just getting mentally back on my feet enough to write a quick story of my adventure.

What is MindCamp?

MindCamp is an “unconference” organized by self-proclaimed geeks… I view it is a great place to learn about cutting edge computer stuff by the people who are most interested in teaching.

The idea is that you bring together 200 people and let them quickly hash out a schedule of sessions with about 6 of them running at any given time. Add plenty of coffee (thank you Starbucks), keep the conference running for 24-hour straight, and it definitely makes for a memorable event. And yes, people did stay up all night attending event, hashing out computer stuff and playing games.

social networkingI attended sessions on SEO, AJAX (these guys are developing some very interesting software for enterprise deployment), Social Networking (led by a co-founder of Biznik, a great Seattle-based business networking tool), Mash-ups, geo-location tools, solving transportation problems, and coffee brewing! I learned all kinds of interesting things.

In addition, Galen and I teamed up to host a session on “Social Networking in Real Estate” which turned out to be a lot of fun and give some great feedback about some interesting uses for social networking tools in developing real estate search sites. Just as Rain City Guide was getting bombarded with the “Bubble Faithful”, our session was temporarily overtaken by someone who wanted to focus the entire conversation on why housing in Seattle is a horrible investment. I did my best to keep us focused on potential users for social technologies in online real estate tools and I hope others who participated learned a little something.

If you’re curious what an “unconference” looks like, there are a bunch of photos available on Flickr, including this classic shot of Galen.

And if you’re wondering what it takes to run an event like this, look no farther than this great group of event volunteers and a lot of caffeine. My thanks goes out to all the great people who put together this fun event. I look forward to attending more of these in the future!

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Bubble blog roundup April 29, 2006

Good news for people who like bad news:

And a couple of articles:

And if those aren’t enough, I suggest the tongue-in-cheek There is no Housing bubble!

It sure is easy to be a hater, isn’t it?

I think both sides are taking a foolish black-and-white approach to the bubble question; clearly there are some indicators that there is a real estate bubble, but the consensus seems to be that the risk of home prices plummeting is low. Home prices will probably be flat until inflation brings prices back to “normal” levels. My concern is that if house prices do pop precipitously, there are going to be serious consequences for home owners and non-homeowners alike.

A similar scenario, different context: A few years ago, the Fed found itself with a small risk of Very Bad Thing happening. That Very Bad Thing was deflation (remember that?). Few economists were convinced that actual Japan-style deflation would occur, but because of the potentially devastating effect of deflation on the economy, the Fed moved aggressively to combat it (giving us the cheap money we used to buy expensive homes) even though the solution could cause other problems. Why? Here is the economist (login required) in 2002 (slightly out of context):

… however small the risk of deflation, the economic cost would be so high that policymakers should respond as if it were a central risk.

Someone who is looking at a home today or who has a sizeable mortgage on their home today should look at all this bubble talk in the same way; the risk is low that your property value will decline 25% or even 10%, but the risk is certainly there. Specifically:

Perhaps house valuations have fundamentally changed over the last 5-10 years and we there is no risk of house price declines. The one argument I do not buy is that our land use laws are making property more expensive; builders are cranking out hundreds units and making loads of money on each unit, meaning they could continue profiting even at lower price levels.

Galen

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Are We Brewing A Bubble In Seattle? April 28, 2006

Probably the most frequent single question I get as a realtor from my friends and clients and contacts is “Are we in a real estate bubble?” Natural question. First because around here we got beat up pretty bad in the crash of the tech bubble. And second because there are a number of very visible real estate bubbles around the country. Third because the term bubble has a horrifyingly exciting connotation to it that is great for selling news stories – so we see it a lot. And we pay attention because we know it could hurt us.

For the last three years, since prices here seriously started rising again, I’ve been saying “No, there are real estate bubbles in places like Florida and Las Vegas and San Diego, but not here”. And my strongest argument was that we were still in the center range of the housing affordability index. Three years ago a family with median income in our area could easily afford to buy a median priced house. No more. Now the median family income can afford about a third of the houses on the market. One of the most readable data sources I know is the Wells Fargo ‘Housing Opportunity Index’. Nice label change – now we’re talking about ‘opportunity’, not ‘affordability’ J

From all the stories we read, we might get the sense that there are two kinds of residential real estate bubbles. One appears to be driven by investors speculating on a continuing rapid rise in prices, and buying multiple properties to (hopefully) rent, and then flip in a year or so. Examples are the Florida coast and Las Vegas . Builders build because buyers will buy, both as fast as they can until the buyers finally get too stretched, or the prices get too high, or both. Then it crashes. That has happened lots of times, and we’ve all heard the stories. Let’s call that a Type I bubble.

The second kind of bubble, let’s call it Type II, seems to occur when there is a limited supply of homes relative to demand, and people start bidding up the prices, i.e. being willing to pay more, in order to get the home they want in the place they want. Jobs and commute times and schools seem to be the big drivers in this. These forces are at work in San Francisco and Los Angeles and San Diego, and they are at work here. In our greater Seattle and east side area, we are blessed with a very strong economy, and continue to enjoy relatively low mortgage interest rates. But we have very restrictive state and local growth management laws and land use ordinances, and building is not keeping up with demand. And commute times force people to concentrate on areas closer to their jobs. In the Microsoft area there is tremendous buying pressure in the 5-mile circle, Redmond, Kirkland, Bellevue, because of Microsoft’s aggressive hiring program. For another example, there’s a lot of upward pressure on prices on Mercer Island - great schools, short commute to either the city or the main eastside companies.

What I am seeing now is very short time on market for new listings, and frequent multiple offers. And as buyers get disappointed and don’t win, they don’t go home, they go faster and bid higher. Note that if new listings are on the market for less time, then at any given moment there are fewer sitting there available for a new buyer to look at - velocity creates its own image of shortage. And every sale sets a new benchmark price for the neighborhood. At the end of March, county wide, we were already up almost 12% from last year, and just starting into the hot-market season. Right now it feels as though prices in my east side neighborhood market may be rising about 2%/month. Here’s a reference note: http://www.msnbc.msn.com/id/12200136/

Well, the fact is that this has happened a couple of times before. In the late 70’s home prices in our area went on a tear, and peaked at 30% appreciation in 1980. And again in the late 80’s - it peaked at 30% in 1990. And interest rates then were a lot higher than they are now. But in both cases over the following years, the median price of a home did not fall from the new lofty level, it just went flat for 2 or 3 years.

So what should we expect now? First, prices will probably go quite a bit higher. The competition for good houses is intense, and the good economy is feeding good incomes - people are willing to stretch to get the home they want. Second, this ‘bubble’ will probably not burst. Type I speculative bubbles do seem to burst, and they make great news stories. Type II demand-driven bubbles don’t seem to burst, they just seem to pause while the world catches up. Ours doesn’t seem ready to pause yet.

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April 27, 2006

heathbillboard 1 Russ and my exchange regarding whether or not Broker’s will ultimately have to deal with complaints about an agent’s blog, reminded my of this “Got Real Estate” Billboard.

It had mixed reviews nationally. Given Wendy works in Belmont Shores where lots of people have seen her with her husband and children, and dog of course, in her bikini, it really wasn’t a big deal. But it made national news when she was fired because of the billboard. Another broker picked her up immediately (no pun intended) and she actually got a lot of business in support of her, when people heard she was fired.

In agent forums, a lot of people from those landlocked states thought it was indecent and unprofessional. But in Belmont Shores CA, someone walking around in a business suit and pumps would actually look weirder than someone walking around in a bikini. When I worked in Manhattan Beach, I had to change my whole wardrobe. I actually stopped traffic when I walked around in my East Coast business attire, pinstriped business suit and white sneakers, like Melanie Griffith in Working Girl. My broker told me I had to ditch my Philly digs if I was going to “work the beach”. I compromised and bought some really cool black Sketchers.

What do you think about Wendy’s billboard ad?

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If anyone ever writes a real estate survival kit….

Here are some of the things I’d add:

  1. Needle nosed pliers to use after you’ve broken the key off in the lock
  2. Toilet paper when you simply gotta go gotta go right now
  3. GPS for directionally challenged (men)
  4. Candy bar (the days get soo long)
  5. Buyer vitamins (Aspirins)
  6. A working pen
  7. 50 acceleration clause forms
  8. List of 25 baby sitters available with 15 minute notice.
  9. Hide-a-key for your car
  10. List of 5 friendly agents who can open the house when you lock your key access insde
  11. If you take a digital camera, make sure your husband puts the card back in it
  12. 3 prepared speeches for when the alarm goes off
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Instant Real Estate Gratification April 26, 2006

sasha skypingOur operators are standing by ready to take your call!

Here at Rain City Guide, we do our best to answer your questions before you ask them (at least that is a major part of good blogging!).

However, I know that we’re barely touching the surface of answering all your Seattle real estate questions and I doubt you want to wait around until we write a blog post about what’s on your mind right now. So, today, I’m releasing an “instant gratification” feature!

Notice how a few of the contributors (on the right panel) have a button under their name that tells you if they are online… Every time you reload a page on Rain City Guide, my server goes out and checks the status of these contributors. If they are online, then making contact with these contributors is simple, using free software called Skype.

So far, I have four RCG contributors who have agreed to take part in this experiment:

I’m not sure what I have to offer via this medium, but if you want to talk with an agent, a mortgage broker, and/or a real estate lawyer, they are available to talk with you any time they are online. (By the way, we’re not going to stop here as more RCG contributors should be coming online soon…)

Contacting any of us is very simple and if you already have Skype, you can skip the first step:

  1. Download and Install the Free Skype tool
  2. Return to Rain City Guide and click on the button under anyone whose status says “I’m Online” and/or “I’m not telling”.

This will bring up a pop-up menu that starts the process of calling us over the internet.

Why Skype?

One last note… The status of some of the people is displayed as “I’m not telling” which is just no fun. The reason is that the status of Skype users can only be displayed on a website if they are connected to Skype through a PC. Anna and I are using a Mac. Nonetheless, I’ve included these buttons because you can still use them to contact us. Assuming I’m online, I’ll definitely answer your calls. Assuming I’m not online, I pay Skype a few dollars a year for voicemail service, so you can always just leave me a message.

little skyper
(this is a photo of our daughter using Skype to talk with her grandparents in Russia!)

UPDATE:

I added both Ardell and Galen (and two more contributors said they were hoping to join up soon)!

I also had some great questions from people about how Skype works. The system is essentially the same as a telephone conversation except it is over the internet. If you call up one of the contributors, you will be talking with them and only them. You are not entering a group conversation, a group chat, or anything like that… It will really just be you talking with them. Simple, but powerful!

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Duvall - Single Family Home - $350,000

WOW! Robbie’s new super duper Zearch site is very, very COOL! But let’s put it to the test. I checked my listing in Duvall and I didn’t have a light blue dot. Seems to me a single family home for $350,000 should have a light blue dot, no? Now I’ll do a post on it and see if the post link shows.

1 First error is that the photo that shows in Zearch is not the photo that shows in the mls as the main photo. This is a glitch in the mls system and not in Robbie’s search tool, so I have to go into the mls and erase all of the photos and reload them to correct it. Even though when I pull up the mls, I see the photo shown here of the actual house, downloads, including Robbie’s, pick up the OLD photo number one. The only way I know to fix this is to empty the entire photo cue and start from scratch. Let’s see if that works.

2 One of the problems with all of the available public sites is that people who are looking for reasonably priced single family homes think they do not exist. If you are not familiar with Duvall, for example, and do not realize that it is within “target range” of Microsoft and other densely populated areas, they might never search Duvall. All search engines should allow you to put in a radius of where you WORK!

3 Here’s a question. I took this great photo of the flowering plum tree on the front lawn before I listed the property. A couple of weeks later when I put it on the market, the flowers were gone. Early spring flowering trees sometimes only bloom for a few weeks. But I love this tree in bloom! Do I have to go take a picture of the way it looks now with all reddish leaves and no flowers?

4 Also, I took a lot of the photos before it became vacant and before I listed the property. Do photos need to show the way it looks today, without that table and chairs?

7 This was my “original” photo number 1, which is the view FROM the house, not a picture OF the house. I have since changed that some time ago to photo number 7 or so. But the dowloads, including Robbie’s, show it as photo number 1 as if the mls has some kind of memory bank that doesn’t update when I change the order of the photos in the mls, and only remembers that this is photo number one when doing a download.

When agents pull up this listing they see a completely different photo (the first one above) than the public sites. Again, I think this is a Rappatoni glitch, and not a Zearch glitch. I also think I know how to fix it.

Woohoo…I feel like a techie fixing download problems! Not bad for a “Granny”!

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Inman asks - Not Allowed to Blog?

3/23/06 “Hi Ardell — I was reading the RCG today and noticed a comment of yours under Russ Cofano’s blog entry that I thought was really interesting and something I’d not given much thought before. You mentioned about joining the big brands and said they won’t let you blog so you’re not jumping on board right now.. is that true? Do brands really dictate stuff like that? If so, I think Inman News might look into this more. With all the push for blogging in the industry lately, this seems peculiar..Just wondering.. thanks! Jessica Swesey, Inman News.”

While I told Jessica almost a month ago that I would do a blog post on this topic, I have to admit I thought the question was a little naive. Almost every truly vocal person in the industry is either a designated spokesperson for a company or a “one man show”. The people I know who have been on Good Morning America or quoted in the paper, are usually the owners of the company. This is true in every industry. If you are an employee of a large company, you are told that if anyone from the press contacts you, you have to refer them to the one person in the company who is designated to speak with “the press”. There are exceptions, especially if your are spouting out only GOOD things, like “There has never been a better time to buy a house!”

So the question isn’t can everyone blog, but who can pull your plug? This goes back to blogging being public and in many ways a form of adverstising. Under State Law, in every state in the country, an agent must have the name of the broker/company on every “advertisement”. Consequently an agent either has to have an anonymous blog where the agent’s name does not appear, or a blog with both the agent’s name and the broker’s name. An agent, though an independent contractor, cannot be a “cowboy” and do things on their own without supervision. The broker retains the right to both see anything that the public can see, usually in advance, and also retains the right to veto its printing.

So how do you blog everyday if the broker doesn’t have time to review and OK your content every day? You can have an insipidly bland blog that simply backlinks to other news items. Even then, many companies do not want you to “advertise” their “competition” or “discounters”, by mentioning them by name. So all of the HOT news on Zillow and Redfin and Lending Tree, could be off limits, because they don’t want one of “their own”, boosting the popularity of these other companies by mentioning them at all.

In real estate forums, when agents want to talk about Zillow, they call it “Z”. Theory is that by even whispering their name in private, you send out spiders into the search engines that cause Zillow’s name to be spread and the website’s popularity to be expanded exponentially.

Anyone who wants to truly discuss the future of the industry in a way that does not simply spout out accolades and full service fees, cannot blog via first person in a blog unless they do it anonymously. But is this NEWS? Can an AT&T employee blog about the future in a way that points out that there are improvements to be made by their employer? Can even a Microsoft Employee be quoted in print that they think Google should win the Inman Award for Innovation? Very naive of someone to think that the First Amendment applies to the little guy who has a “BOSS”.

Back around March 23rd, I interviewed with a company that treats their agents as employees. They weren’t sure if I could blog, but they were sure that I couldn’t “talk to the press” ever. Since your blog entries can be lifted and quoted by the press…they felt that it was possible that blogging activities would be limited or possibly even prohibited.

So the question isn’t whether or not you can blog, the questions is what are you allowed to say in the blog? I’m sure even Jessica has to run her content by someone to be approved, before it can be “printed” and available in the public eye.

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RCG’s Zearch is Released! April 25, 2006

Robbie has just released what may be the most addictive home search tool I have every used!

Search Tool Codename: Zearch!

Some obvious highlights include:

I know the search is addictive because earlier today I showed this to a friend who is in the market to buy a home in Seattle and we couldn’t pull ourselves away from bouncing around the map. To get an idea of what I mean, follow this link to the detail page of this listing in Ballard.

You should see a few things:

The color dots all represent different homes that are currently on the market in the nearby area. Light blue dots mean the house is far below the average listing price while dark red mean it is far above the average listing for that area. The addicting part is that you can click on any of these dots to bring up the home details (and photos) for that home. With my friend sitting beside me, we kept searching for light blue dots amid lots of red hoping to find a “deal”. Very interesting stuff.

You might also notice on the map that there are some raindrops. These represent Rain City Guide blog posts that have been geocoded. This is subtle, but very powerful, as it essentially represents a mapped-based archive page for Rain City Guide’s posts. The cool part about this is that as you’re searching for background on a home, you can see what RCG posts have said about the neighborhood! And as we continue to add more neighborhood content on Rain City Guide, I’ll continue to geocode the posts, which will automatically add more background data to the home search tool…

zearch screenshot

What else has Robbie done?

For starters, he didn’t mess with the stuff that works well. You can still use the site to:

Some other things to notice about the new detail page is that whenever you move around on the map, all the nearby active listings show up. More impressively, you can also toggle on the nearby schools, gas stations, grocery stores, and other points of interest associated with every day living. Again, the color coded pushpins show that homes in Medina are bright hues of red, many homes in Renton are purple, while most of the homes in this area of Tacoma are blue. So much cool stuff, so little time!

On a side note, today was my last day as a transportation engineer! For the next few weeks I’m unemployed! :)

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HIT ME WITH YOUR BEST SHOT! April 24, 2006

OK Rain City Guide Contributors! It’s time to PUMP UP THE VOLUME! IT’S “SWEEP’S WEEK”!

puv 1 Actually it’s “Sweeps MONTH!” Everyone start posting away to show those Inman judges what a multi-faceted group we are!

And RCG FANS, go into that Inman site and nominate away!

I’ll have to come up with some insider juicy stuff…or controversy…what do you think will get the judges attention?

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