Monthly Archives: September 2008

Epic Failout and Thoughts On Moving Forward

So the news comes that the bailout package has failed to pass the House with 133 Republicans and 95 Democrats voting nay.  Well, at least it was a pretty bipartisan fail.  I’m sure we will be treated to much sound and fury from the talking heads and the chattering class as to why, who’s to blame, and so on.  At the same time, things are going to get worse before they get better, so I expect something new to come down the pike any day now.

I would like to recommend three immediate things that Congress and the Administration can do to buy some time while they work towards a more comprehensive solution that can survive a vote.  What we need now is time more than anything else, so all three suggestions are geared towards things that they can do in the next couple of days.

1.  Suspend the mark-to-market accounting rule for 90 days.

The bailout package included a provision that would have enabled the SEC to suspend the mark-to-market accounting rule:

A provision in the bill, whose adoption was in doubt after the House of Representatives rejected it Monday, gives the Securities and Exchange Commission the right to suspend — by rule or order — mark-to-market accounting under Statement Number 157 of the Financial Accounting Standards Board.

While the article linked to above shows that there are some powerful and influential people (among them Arthur Levitt, former chairman of the SEC) who are against suspending mark-to-market rule, I believe that as a short-term, breathing-room measure, it makes sense to do so.  Hence, I would do it for 90 days.

I want to make clear that I’m not against mark-to-market rule in general.  There are lots of good reasons to have this rule.  But I do agree with Jeff Miller on that there is a difference between a normal market and a panic-driven, illiquid one.

Furthermore, while mark-to-market in and of itself may not be a major problem, when combined with reserve requirements of banks and other financial institutions, it can become a catalyst for meltdown.  Say a bank has to hold 10% of all deposits as reserve requirements (the Fed can set it between 8% and 14%).  If mark-to-market rules require a significant writedown of assets, such as mortgage paper, then the bank comes under enormous pressure to sell assets to keep its reserve requirements up.  That in turn induces further declines in asset prices, as paper floods the market, which in turn runs into reserve requirements, and so on.  That’s a pretty crappy feedback loop.

I had the opportunity to speak with someone who should know some facts (he’s a representative of one of the largest foreclosure-related companies) recently, and he pointed out that some 95%+ of mortgages in the U.S. are absolutely fine.  The debtors are faithfully making their monthly payments.  Some of these mortgages were combined with subprime mortgages and other more dubious debts into exotic mortgage-backed securities and sold — the source of many of our problems today.

With a bit more time, analysts can begin to delve into the morass that is CMBS and CDO and other instruments and start to figure out which ones are good and which ones are bad.  That in turn creates folks willing to buy mortgage securities at deep discount.

Plus, that bit of time can give the legislators and regulators time to work with industries to come up with a stronger, less interventionist, program to help deal with the crisis at hand.

2.  Rein in the breathless media

While the First Amendment prevents any direct government action to restrain the media, certainly the various leaders from the President to the Speaker of the House to the candidates for various offices can step up and act like adults.  They can explain to the nation that while we do have some problems to work out, that (again) 96% of mortgages are not in default, that people are still making their monthly payments, and that the problem can be dealt with.  Someone needs to point out — and directly contradict the breathless press reports of doom and gloom — that the fundamentals of the economy are (were) pretty decent.  Employment is still high, Q2 of 2008 showed a 4.3% gain in productivity, and things just aren’t that bad.

The whole situation, to some extent, was a creation of the media.  Part of the short-term solution needs to be putting the idiots running our newsrooms in their place.

It is no secret that most business and finance journalists have absolutely no idea what the hell they’re talking about.  Business leaders, economists, and others who do know need to step up now and start speaking up directly to the American public.

3.  Trial Run of Insurance Plan

While it would be great to have a single bailout package that calmed everyone down, without turning into a fascist/socialist state, I’m afraid it’s going to take some time to get done.  Why not try a trial run of the least-intrusive plan, that of the House Republicans?

Of course, it would be helpful if the “patriots” on the Left would stop playing partisan politics for a moment, but I think the Democratic leadership could probably make that happen if they wanted to do so.

Again, as a short-term measure to buy time and create breathing room, why not go forward with a $10B or so plan to insure “toxic assets”?

The “insurance” plan works by creating incentives for private market participants to take the risk of buying mortgage securities, because if they go into default, the insurance pays off.  But until they go into default, there is no massive cost on the part of the insurer (aka, the government).

The thought appears to be that offering to insure “toxic assets” might provide enough incentive for private entities to start going bargain hunting.  Again, with 96% of all mortgages safe and sound, it seems like a great time to go buying up mortgages for pennies on the dollar.  Insurance adds a layer of risk protection that further incentivizes private market players.

If the first $10B worth of securities are federally insured, and those securities get snapped up by the market, then the program can be expanded.  If they all go into default, then the losses to taxpayers is limited to $10B or so.  Seems like a low-risk approach to take that will have the effect of reassuring the credit markets that there are indeed buyers out there, if the risk/reward is low enough.  Again, while that is working its way through the market, legislators have time to work on the bigger package.

Breathing Room

This whole affair really reminds me of a Chapter 11 bankruptcy filing.  Contrary to popular imagination, there are situations where companies go into Chapter 11 (Reorganization) bankruptcies not because their business is fundamentally screwed, but because they experience short-term cashflow problems.  They may have customers, may have a valuable ongoing business, but due to loan covenants and the like, they face going out of business.  Seasonal companies, such as retailers, or big-ticket sellers (who may have $50m in outstanding invoices, but only $2m of cashflow) often face problems like this.

Oftentimes, they go into pre-arranged bankruptcies to buy some breathing space while the business works itself out.  Lenders are happy, as they get to reorganize the debt and get paid, instead of having to liquidate at cents on the dollar.  The business keeps going, the employees keep getting paid, etc.

What we need now is that pause, that breathing room, while Congress and the White House get together again and try again for a more comprehensive bill.

I think the three things above could help, not in the permanent solution, maybe, but certainly in the short-term (say the next 90 days or so).

Or… I could be dead wrong.


Writing Case Studies for Marketing

In the comments of this post, the Blogfather of La Blogstra Nostra (loosely translated as “this blog-thing of ours”) Joe Ferrara succintly makes a great point: realtors should blog about ‘solds’.  This is a fantastic idea that I frankly do not see enough of on the

And writing a case study (a marketing case study, not a business school case study) is really simple and straightforward.  I don’t know that I’m the best at doing these, but I have written a fair amount of them over the years, and adapted to real estate, here are my suggestions.  In fact, I’ll write a fake case study along with this post as an example.

Overview & Organization

A case study is a brief description of a client, a problem (or set of problems), a solution (or a set of solutions), and result.  It should be no more than three written pages long, and most of the good ones are one or two pages.  If you aim at between 750 – 1000 words total, you should be fine.

The typical case study is broken into five parts:

  1. Summary
  2. Intro
  3. Problem
  4. Solution
  5. Result

The Summary is typically right at the start, or inserted as a sidebar (look, for example, at this case study (PDF) in the IT industry).  It succintly states the key facts about the client, summarizes the Problem, the Solution, and the Result.  Write the Summary last.  Even if you know exactly what you want to say, it’s best to write the summary after you’ve written the whole case study just in case you see a different way to phrase things.


The Intro should be one paragraph that sets forth the client and the client’s goals/objectives.  Avoid the temptation to get verbose in the Intro.  You want the reader to understand who the client is generally and what the client wanted to do, and that’s it.

In our fake case study, the client is a young couple who recently had a baby and has decided to buy a house (a very common story, after all).  They live and work in NYC, and make a moderate income, which makes it impossible for them to buy in the City.  They’re new, they’re confused, and they don’t know much of anything except that they want a nice house, with more space than their 1BR apartment, and want to spend maybe $300K in total.  They have saved up $30K for a down payment.  Maybe their names are Joe and Susie Evans, and they have a 9-month old girl, Madison.  Joe is an advertising exec for a small agency in Manhattan, and Susie is in Event Planning for a big corporation.  Their annual income is $125K collectively, but Susie is thinking about going part-time.

We can go on and on, but most of these facts are not relevant.  So the Intro is brief and to the point:

Joe and Susie Evans, a young first-time buyer, was looking to buy an affordable starter home near New York City after having a child.  Their budget was about $300,000, and they had saved up about $30,000 for down payment.  They came to me from a referral, as I had helped a friend of theirs buy a place in Jersey City.


In this section, in as many paragraphs as needed, state the problem(s) that the client was facing.  One paragraph per problem.  Since in real life, there are dozens upon dozens of problems and issues, you will want to focus on one or two that are really relevant to the case at hand, and also illustrate the particular solution you crafted.

In our example, the problems are several:

  • 10% down payment is not much, especially in a tightened mortgage environment.
  • Joe and Susie Evans turn out to be prototypical yuppies, who can’t survive without Whole Foods, Starbucks, public transportation, great restaurants, and an urban environment.  The kinds of towns they like are way out of their price range for a single family house.
  • Both of them work in NYC, and proximity and ease of commute to NYC was critically important for them.  Joe in particular did not want to travel more than 45 minutes each way to get to work in Midtown.  Again, most communities that fit the requirements are way out of their price range.
  • Joe wants a big backyard for little Madison to play in, while Susie wants topnotch public schools, a walkable downtown, and both want lots of space after six years in a tiny 1BR apartment in Brooklyn.

There can be other problems as well — maybe joe is in a bowling league in Brooklyn that’s important to him, so he wants to be nearby.  But cut things down to essentials in writing the Problem section.  For our example, we’re going to focus on the mismatch between their expectations, their financial ability, and the market conditions.

In consulting with the Evans about their needs and wants, it turned out that their expectations were unrealistic considering the market around NYC.  They did not want to commute more than 45 minutes to NYC, wanted a large house, a top-notch school system, and a walkable, attractive downtown area with restaurants, shops, and entertainment.  The homes in markets around NYC which fit their requirements averaged $750K in price, with the low end still a healthy $100K over their budget of $300K.

Furthermore, even at their budget of $300K, a 10% down payment was going to be tough in the current mortgage environment.  It was not at all unusual to have banks require 30% down payments before making a loan.


In the Solution section, focus tightly on the problems as defined.  If you’re writing it up at all, chances are, there was something unique about how you solved their problem(s) that makes you stand out and look good.  How can you connect it up to the problems as defined?  The Solution must flow from the Problem.  It doesn’t have to be one-to-one; chances are, the Solution is where the bulk of writing happens.

Also, be specific when discussing the Solution.  “I worked hard with the client to help them” is not a Solution.  It’s an advertisement, and no one has any reason to believe you.  Try to use only facts to showcase the solution, rather than generalities.  It wouldn’t be a bad idea to trim every single adjective and adverb from the entire Solution section, actually.

In the example, I’m going to make up a probably unrealistic story about builders caught in a credit crunch.  But it is important that the Solution here relates to how the agent ‘solved’ the unrealistic expectations problem.

In order to assist the Evans family, I had to properly attune their expectations with the realities of the market to avoid disappointment.  Using our Needs Assessment Matrix, I walked the Evanses through 25 factors, separating them between Practical Needs and Emotional Needs.  Through the NAM, I was able to help them prioritize their requirements.

After having set the priorities, I showed them market reports showing listing price, sold price, time on market, inventory levels, and trends in all of those things over the past 90 days, 180 days, and year.  Upon request from Joe, I pulled a report showing those data points over the past three years for seventeen areas within 45 minute commute time from midtown Manhattan.

In addition, I asked Bob Corbett, a mortgage broker with 25 years experience, to sit with the Evanses and explain the current mortgage market.

During the week or so that the clients were considering their options, I leveraged our office’s e-Marketing and social network platform — my personal blog, Twitter, FaceBook, and LinkedIn — to reach out to various market participants, reaching over 5,000 Realtors, mortgage brokers, attorneys, and other professionals in the NYC metro region.  I explained the situation, corresponded by email, instant messenger, Twitter, and telephone with over seventeen respondents.

By the end of that first week, I found a developer who had purchased a 2BR condo in Jersey City that he had planned to renovate for resale.  Unfortunately, the recent troubles in the credit markets threw that plan off-track, and he was facing significant losses.  He had paid $275K for the condo originally, and was willing to sell it at cost to avoid foreclosure.  I notified by clients, and arranged for a showing the very next day.  At the same time, I arranged for Bob Corbett to go to work for my clients with the bank servicing the developer’s mortgage.

The Evanses, having reprioritized their requirements based on our NAM process, and having a clear picture of the market conditions, saw the condo.  It was a ‘fixer-upper’ requiring significant renovations.  Nonetheless, given their financial situation, it was a real opportunity.

I negotiated with the developer directly and arranged for his company to get the contract for renovation, while dropping the sale price to $250K.  He wouldn’t even have to move his equipment from the location, would end up recouping most of his losses on the sale through the renovation work, while my clients got a deal on a property that met most of their top priorities and could be resold in a few year’s time for more than they had paid.


In most marketing case studies, the result talks about ROI, increased revenues, efficiency metrics, and the like.  For realtors, I’m not sure those things work.  But testimonials do.  And this is the ideal place for those.

You want to connect the Result directly to your Solutions as much as possible.  In fact, it isn’t a bad idea to write the testimonial you want, then get permission to use it.  Most people you ask for a testimonial are happy not to have to do the actual work of coming up with a testimonial anyhow.  As long as they sign off on it, the words are as good as theirs.

The Evans family moved in six months ago into their new 2BR condo in Jersey City.  Financing was difficult, but the lower cost of the property meant that $30,000 was actually 12% down payment, and Bob managed to find a willing lender at a competitive rate.  The developer accepted an installment plan for his work, and is being paid monthly for the work done.

“We could never have done this without you,” said Susie Evans in a recent phone call.  “Without your helping us understand our own priorities, I don’t know if we’d ever have thought of Jersey City.  Without all your social networking tools and contacts, we could never have found this property in the first place.  I just don’t know how to thank you enough.”

Back to the Summary

Now that you have the case study done, now you can go back and write the Summary.  Use bullet points or very brief sentences.  You want the narrative in a single glimpse.

Client: Joe and Susie Evans

Type: First Time Buyer


  • Improper expectations from lack of market knowledge
  • Financial resources inadequate for the kind of house they wanted


  • Educate them on the market, on mortgages, and help them prioritize their needs by using the Needs Assessment Matrix
  • Leverage social media, contacts, and e-Marketing platform to find properties


  • Located a developer who was facing foreclosure on a 2BR condo in Jersey City
  • Negotiated an off-market deal benefiting both the seller and my buyer clients
  • Helped arrange financing, as well as renovation work
  • Clients could not be happier in their new starter condo home

Final Thoughts

This whole fake case study was about 850 words, and comes to two pages of written text in a word processor.  The story itself may be completely bogus and full of holes — for one thing, I may have broken all sorts of laws and regulations in New Jersey.  But that isn’t the point.  I’m not a realtor, and I don’t have war stories.

The format, and the techniques of writing these simple case studies might be something worth investigating.

For a case blog post, as opposed to a formal case study, you can obviously relax all of the rules, as long as you are able to put together a coherent narrative.  The important thing is to tell the story of the client, of the challenges, the solutions, and the positive result — all because you were involved in it.

In my view, this may be the among the most effective sort of marketing and self-promotion that an agent or a brokerage can do via blogs and websites.  How better to establish your expertise, your specialty, your unique tools and platforms, your unique skills than by telling stories of actual clients you have helped and how you’ve gone about it.

In fact, I’m sure that there are many realtors who have already been doing this. I’d love to see examples of what’s worked (send me the links, or just post them in comments — I’ll have to approve the ones with multiple links, but happy to do it).


In the Name of All That is Holy, You Should Stop Blogging

The inimitable and simply delightful Teri Lussier recently posted her observations of RE BlogWorld ’08 in Las Vegas. In it, she mentioned a “reverse Black Pearl” by yours truly:

And finally, I’ll leave you with this brutally honest reverse Black Pearl from Notorious R.O.B., who, during Jeff’s session, shared his opinion about the quality of writing on some real estate blogs: “In the name of all that’s holy, you should stop blogging!” Ouch, Rob.

As Teri mentioned, I need not explain that statement, but I wanted to. It’s one of the topics that’s been swirling around in my head for a while. And judging by the knowing laughter that greeted that statement during REBlogWorld, I’m thinking that I am not alone.

So… I stand by my statement fully. :)

The Context as Pretext

The context of the plea was when Jeff Turner had gone over a number of new, innovative tools that might help real estate agents with their online efforts. Jeff kept describing one tool after another, all of which had to do with audio or video as content for a blog.

The question that naturally arose, of course, which I asked him, was whether he thought these were great tools for realtor blogs because something inherent in audio or video, or because the quality of written content on these websites is low.

Hence, I asked, “I know there are some realtor blogs out there that are so badly written that they make us all go, ‘In the name of all that’s holy, you should stop blogging’. Is that one of the reasons why you’re recommending so many audio/video solutions here, because agents are somehow able to talk better than they can write?”

Bad Writing is Not Good Branding

Thing is, this is a somewhat serious point. A bad blog is not an asset — it’s a liability. Someone who may have been your ideal client might look at your utterly crappy website or horrid blog and conclude that you are a major league idiot, even if you happen to be the most knowledgeable real estate professional in history. They don’t know you; if all they get to see of you is a terrible blog, then as far as they’re concerned, you’re a terrible agent. Period. End of story.

It would be a major step forward for such an agent to suspend blogging. Indefinitely. And try to scrub the Interwebs of all clues as to the existence of such a blog once upon a time.

So if you’re a bad writer, then you would be doing yourself a favor (as well as the rest of the industry) by stopping your blogging activities and doing something else that would show off your scintillating personality. Maybe that’s audio. Maybe that’s video. But if you can’t write, please, please do not blog.

For your own good.

And mine.

Bad Writing Usually Means Bad Content

The tragic correlation, of course, is that people who can’t write rarely produce amazing non-written content. Unless there are unusual extenuating circumstances (e.g., you are blind, or can’t read/write English though you can speak it some with a nice accent, etc.), bad writers are typically bad content producers, period.

Because good writing requires a few things. For example:

  • logic
  • coherent thought
  • imagination
  • narrative ability
  • understanding of the audience

All of these things also come into play when creating any sort of content. Think about all the truly horrible movies you’ve seen. Most lacked one or more of the above. Most bad sci-fi movies lack logic for example (e.g., Star Wars has giant lasers that can destroy planets but can’t figure out fully automatic weapons?), while most bad romance movies lack coherent thought (see, e.g., What Happens in Vegas).

So the thought that a realtor who can’t write worth a damn is going to create a fascinating video blog, or vlog, is too optimistic by half. Unless the realtor in question looks like Gisele, in which case I suppose some folks would watch that vlog if she were explaining the ins and outs of the home inspection process in a dry monotone. But if she does look like that, she probably should think about a different career. One that involves meeting Leonardo Dicaprio for lunch on a regular basis.

So What Do I Do If I Sux?

There are two choices, as I see it, if you take a good long look in the mirror and realize that you don’t look like Gisele Bundchen, and that you can’t write.

Choice #1: Become a better writer

Let’s be honest — none of us are in the running for the Nobel Prize in Literature. We’re bloggers, who write about real estate. It isn’t that difficult to become a better blogger. Reading good writers — both bloggers and dead-tree authors — really helps improve one’s own writing. The rest is just practice. Then practice. And even more practice.

Choice #2: Stop blogging, start working

The other choice is to stop blogging. Fact is, the web-centric real estate model may be the future, but it isn’t necessarily the be-all, end-all right now, today. Russell Shaw had a great post up recently where he touched on this.  While that post was about the power of being the listing agent, the subtext woven throughout goes something like this: “The tried and true still works”.

So… honestly, if you’re no good at the whole content-creation thing… why bother?  Just work on increasing your sphere of influence, going on more lunches, networking via offline methods, and all of the other things that have helped realtors be successful for decades — long before Sergey Brin was even out of diapers.

Final Words

I was recently at a speech where the keynote told the following story (which I am completely paraphrasing from memory):

I saw Larry Ellison, CEO of Oracle, at a education conference tell a room full of teachers that he believed teachers are underpaid.  In fact, Larry thought teachers should make over $1m a year.  The crowd went wild with applause.  The catch was, Larry continued, with the power of the Internet, he only needed 100 of them in the entire United States.  Dead silence in the room.

Think about it.  How many real estate bloggers does the country really need?


Into the Maelstrom, We Go

There, but for the grace of God, go I.

There, but for the grace of God, go I.

If you are at all interested in the real estate industry, then you need to be reading Dan Green on a regular basis. I just met him at RE Blogworld, and have put his blog into my reader ASAP (and linked it here). Dan is brilliant, and understands the financial markets and mortgage markets better than most people in the world.

And even he finds himself getting verbal whiplash these days from having to contradict himself more than Obama does.

Exhibit 1: Dan’s post of Sept 16, 2008 titled, “How Mortgage Rates Are Responding To Lehman Brothers, Merrill Lynch, And AIG” which says, in part:

It’s a shame because the post went deep on Wall Street’s recent troubles and how each piece of bad news actually helps everyday homeowners. When I went to publish, the post vanished. And by that point, markets were already open, mortgage rates were already plunging, and I wanted to be the phone with clients. I did manage to Twitter, however.

A one-paragraph recap follows:

The government’s takeover of Fannie Mae and Freddie Mac rendered mortgage bonds among the safest investments in the world. Therefore, when political or economic uncertainty exists, mortgage rates should fall in safe haven buying.

The post was especially timely because safe haven buying driving mortgage rates down yesterday. As the stock markets shed $800 billion in value, investors moved into safer instruments like bonds — including mortgage bonds. With more demand, prices were up and rate were down. And how.

Because mortgage debt is now government-guaranteed, the sell-off in stocks was terrific news for both active home buyers and for homeowners that missed last week’s gold rush. However, it did little to soothe Wall Street’s nerves. That job falls to Ben Bernanke.

Then, a mere seven days later, on Sept 23, 2008, Dan posts “Mortgage Rates Respond To A Rapidly-Devaluing U.S. Dollar” which says in part:

And lastly, the mortgage market got hit.   Because mortgage bonds are repaid in U.S. dollars, the value of those repayments dropped.  This forced mortgage rates higher because the only way to entice investors to buy devalued mortgage-backed bonds is to offer them with a higher interest rate.

If you’re wondering why conforming mortgage rates are up by 0.750 percent since last week, this is it — it’s because mortgage rates are responding to the expectations of a weaker dollar going forward.  This is the reverse of what happened in August.

Simply amazing, in part because Dan is spot on, and in part because politicians in government simply do not seem to understand the economy and markets, despite being Wall Street tycoons and brilliant academics and the like.

Why wouldn’t inflation rise when the government has just signed a blank check to big American corporations?  Of course it would.  And as inflation rises, interest rates — including mortgage rates — are bound to go up as well.  People don’t enjoy getting paid 10 years out in dollars that are worth half what they are worth today, do they?

This whole fiasco with the bailout reminds me of my favorite Thomas Sowell quote, “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.

At the Blogworld event that just happened, the panelists on the Financial Blogs panel were unanimous in excoriating the government — and they appeared to be politically all over the board — for its latest actions in intervention.  One panelist called it (paraphrasing) “the absolute triumph of socialism.”

I think we’re seeing the absolute triumph of idiocy as well — and all parties, all branches of government, are indicted in this.

Until things stabilize — and no one knows when that will be — we’re in for a wild ride.  The markets behave in unpredictable (although common-sensical) ways to economic shocks like a $700B bailout of financials by the government.

But a couple of things seem possible, at least when one thinks about our industry.

1.  If it was hard to find buyers who can afford to buy houses before, I’m thinking it’s going to get more difficult, not less, going forward.  Even if the removal of junk mortgages from the market (thanks to the taxpayer bailout) means banks can breathe easy again, the inflation-induced rise in mortgage rates (combined with the shellshock of banks coming out of this mess) likely means fewer buyers for homes.

Of course, that means home prices are about to take another pounding.  If I were a seller, I’d be shaving another several thousand dollars off the listing price right about now.

2.  Selling a house in today’s environment — unless you absolutely have to — became far more complicated and likely less attractive.  For example, I locked in 30-year fixed rates long  before this crash (something in the 6% range, I believe).  Inflation could very well hit 6-7% annually, as most financial experts appear to think the $700b figure is actually the floor not the ceiling of this bailout.  If inflation = my interest rate, then my loan is effectively free.  Unless I can get a bank to give me free money (zero-interest loans) to buy my next house, I just can’t see how it benefits me to be selling in this market.  At all.

All in all, I have a feeling that realtors are going to have to get educated on this in a hurry.  Some of them really understand finance, the markets, and macroeconomic factors and may be able to help clients make the right decision.  But the ones who think “yield” is only a street sign are going to have a tough time getting people to trust them as real estate experts.

As Alex Periello likes to stress, real estate markets are all local.  That remains true, of course.  But giant macroeconomic factors will play a role, at least if your client is paying in (or looking to get paid in) U.S. Dollars.  It’s high time to get boned up on financial matters.


From Blogworld: Financial Blogs Influence Markets? O Rly?

I’m actually sitting in the session with Barry Graubart, Paul Kedrosky, James Ledbetter, Howard Lindzon, and Felix Salmon listening to them talking about a variety of topics. None of which appears to connect to the title of the damn session: “How Financial Blogs Influence the Markets”.

Because coming at this from our side of the blogosphere, where we’ve been dealing with an out-and-out hostile media who refuses to do any homework, do any in-depth investigation into topics connected to real estate, and just goes on like a chicken sans head… I’m not convinced that the blogs influence the markets to begin with. So the “How” a blog influences a market is presumptive, in the extreme.

Let me see if I can ask them the question and see if we get a coherent answer.

–> Asked the question, got my answer.

The short answer: “The blogs do not affect markets, at all.”

So what the hell am I doing in this session? :)  Well, it’s fun to hear people yammer on about the market.

For what it’s worth, I think we in the have moved past the finance markets in one respect.  The financial markets are dominated by institutions moving huge sums of money.  The primary consumer of market data are giant banks and hedge funds and whatnot.  As one of the panelists here pointed out, those individuals rarely have time to be reading blogs.

Our industry is based firmly on consumers — American families and individuals who are looking to buy and sell their homes.  So the primary consumer of data and information are consumers.  If we can get much better at disseminating market data, and solid market-related opinions, I actually think can move markets.  Maybe not national markets, but certainly local markets.  And all real estate is local.

Individual homesellers should be trusting market data from Rain City Guide, for example, instead of Case-Schiller index.  That will help move the markets in the Seattle area because we’re right on the frontlines.

More than ever, I am convinced that we as an industry — and especially those of us in the — have to think about how we can influence our local markets by providing data, advice, and information.  That this socially beneficial function is closely tied to the real estate blogger’s profit motive is a good thing, in my opinion.