Monthly Archives: May 2010

Shiva Ranks! (A Way To Rate Innovations)

Recently, I mused on the nature of innovation and how it goes hand-in-hand with destruction.  The key thought, as pointed out by a savvy commenter, in that post is:

Or thought of another way, when you look at the innovations in the industry today — whether mobile apps, CRM technologies, social media, RPR, or whatever — you might ask, “What part of the industry does this innovation destroy?”

If the answer is “none”, then that thing, whatever it is, is not innovation.  It is, rather, incremental improvement; a marginal gain in efficiency.  It isn’t the automobile, but faster horses.

It seems to me that the corollary of “if it doesn’t destroy, it isn’t innovative” is that the degree of innovation is related to the degree of destructive potential.

So where would some of the recent much-discussed innovations rank on the “Shiva Scale” — the degree to which said innovation would destroy one or more parts of the real estate industry?  Let’s say the Shiva Rank goes from 1 to 10 where 1 might be “as harmless as a baby bunny” and 10 might be “thermonuclear bombardment from orbit”.  Where would some of the recent innovations rank?

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Something Wicked, This Way Comes: Housing Market Signals

Ah, Spring… a time when a young man’s fancy lightly turns to thoughts of love… and respected real estate market analysts voice cautious optimism…

For example, here’s Lawrence Yun of NAR voicing cautious optimism:

Yun expects a slightly stronger demand for housing and a fairly even level of foreclosures entering the inventory pipeline before easing in 2011. “We expect distressed home sales to account for 30 to 40 percent of transactions for the remainder of this year,” he said.

And here’s Mark Zandi, Chief Economist of Moody’s, doing the same:

Zandi also forecasts improving demand for housing, but with foreclosures rising later in 2010 before easing in 2011. He said home prices may weaken this year. “The housing crash is over—nearly. We are now near the bottom,” he said. “There will be no real price growth in 2010 or 2011. Whether home prices weaken is unclear, but it will take two more years to work off excess housing inventory at the current sales pace. Of course, if demand picks up, it would take less time for prices to rise,” he said.

Then there is David Crowe, Chief Economist for NAHB:

“Home buyer tax credits clearly did their job and got people back into the marketplace,” said NAHB Chief Economist David Crowe, who also served as moderator of the two-hour webinar.

With the expiration of the tax credits in April, Crowe said the housing momentum is being carried forward by low interest rates, pent up household formations, stabilizing prices and budding employment growth.

Freddie Mac is almost bubbly (PDF):

The reason to expect this relatively benign outcome is that, despite short-term swings in sales activity, the underlying fundamentals for housing markets are steadily improving. The job market report for April showed a rise in nonfarm payrolls of 290,000, the largest new hiring in four years. While temporary Census workers accounted for 66,000 jobs, private payrolls posted a respectable gain of 231,000. The other “headline” figure in the report—the unemployment rate—gave a head fake by rising two tenths, to 9.9 percent. Somewhat paradoxically, this was due to improved labor market conditions, which attracted over 800,000 job seekers back into the labor force. A broader measure of employment that is not affected by changes in labor force participation, the employment-to-population ratio, rose two tenths of a percent. Overall, labor market trends are looking much better than a few months ago. More robust job growth and the incomes this will bring should directly contribute to the housing market recovery, and will likely also have further indirect effects by boosting household confidence.

And we have very encouraging data from the Commerce Department, Fannie Mae, and others.

So why do I feel an unnamed dread going up my spine?  Is it just some sort of Eeyore-itis?  Perhaps, vampire-like, when the sun is shining and the birds are singing, I have to retreat to the chill of the grave.  Yeah, I probably need more Vitamin D….

Nonetheless, I have a bad feeling about the housing market, because of data that economists rarely look at.  That probably makes them right and me wrong (and boy, I’d love to be wrong on this), but hey, this is a blog, so… what the hell.

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Interesting Perspective on Professional Values

From two eminence grises of the legal world comes this article those of us in the thinking about raising levels of professionalism in the real estate industry might want to think about.  The money graf:

There is, of course, no turning back: Law firms must be run in a businesslike manner. But they should not just be run for the greatest possible economic return. Law firm leaders must emphasize other values as they reorient their firms with respect to their clients, their partners and their associates. And they should redefine their own personal responsibilities and commitments. At the end of the day, they and their partners should restate, for the younger generation, the historic concept of what it means to be a legal professional, which has generally meant that private lawyers have public responsibilities beyond their immediate self-interest and beyond the needs of their immediate clients. (Emphasis added)

The two authors of this article are not pajama-wearing bloggers in the basement… like yours truly.  Ben Heineman is the former general counsel of GE, and teaches at Harvard Law School and at the Harvard Kennedy School.  Bill Lee is the co-managing partner of Wilmer, Hale — a multinational megafirm based in Boston — and also a professor at Harvard Law.  Like Todd Carpenter, they’re kind of a big deal.

It is interesting how the legal profession is trying to rediscover itself, at the same time the real estate community is trying to define itself.  Technology and the economic realities are driving both towards unprecedented self-examination.

The question for real estate, however, is an interesting one.

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Shiva, The Destroyer

We worship creativity.  In describing a business, a leader, a product, or a service, I can think of no higher praise than to say it is creative, or visionary, or innovative.  Whether in marketing, or technology, or business process, or a blogpost, all of us admire creativity, strive for creativity, and think about creativity.

The real estate industry in particular has a love-love relationship with creativity.  NAR has its Game Changers, Inman has its Connect Create developer challenge, companies are lauded for their innovations, individuals praise for their creativity in using social media for real estate business (or whatever new creative thing they’re doing).

What I wonder about today is whether people truly worship creativity, or pay lip service to it.  Do you really want innovation?  Are you sure you’re prepared for what creativity means?  Are you certain that you want creativity in your life, in your business?

The Hindu deity Shiva is often said to embody destruction and regeneration, like the forest fire that clears out the dead leaves and old growth to enable new shoots to emerge.  To embrace creativity and innovation, then, is to embrace destruction.  Are you ready?

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Real Estate Fun With Visa Concierge

A couple of days ago, I read this post on the Four Hour Workweek blog about a guy’s attempt to find out the limits of free credit card concierge services.  He had the free concierge do things like help him with a crossword puzzle and book space travel.

It’s a hilarious post and I learned that I do in fact have an extraordinary resource, seeing as how I have a Visa Signature card, which comes with a free Visa Signature Concierge service.

So I got curious.  And ran a couple of tests to see how much the Visa Concierge could help me in the world of real estate.

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