Monthly Archives: March 2011

Be Wary of the False Spring in Real Estate

Shiny happy people!

Real estate people are some of the most optimistic people I know. They have to be in order to work a business in which they don’t make a penny without a transaction getting done, and the driving motivation for the consumer is a dream: The American Dream, the Dream of Homeownership, Your Dream Home. Real estate, to some extent, is about dreams, hopes, and visions of white picket fences, kids playing in the backyard, and tasteful interior design reflecting your success in life.

So I generally do not fault real estate agents when they put forth honest opinions that perhaps we have finally hit bottom in this historically ugly housing crash. They’re not being disingenuous; they’re simply optimists.

At the same time, in the current market/environment, I believe a professional has to caveat every positive and be extremely wary of false signals. We’ve already had one false signal when the First Time Homebuyer Tax Credit artificially shifted demand forward, thereby leading some people to claim we’d seen the bottom of the market. Of course, when all that demand dried up, the housing market continued its downward slide.

Jim Walberg, and Ira Serkes, both exemplary professionals with years and years of experience, who know their local markets, and analyze the sales data personally, recently suggested that some markets are turning around. And yes, since every market is different, every market is local, you should call your REALTOR for more information or whatever it is that the NAR commercial says. So please don’t bother commenting/protesting that trends don’t mean anything in your particular local market: I know.

Nonetheless, any reasoned analysis of calling the bottom has to take at least the following factors into account, at the very least as a risk.

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This Way Lies Victory: Fixing NAR’s Political Survival Initiative


Since I broke the news of the new NAR REALTOR Party Political Survival Initiative (“#RPPSI” hereafter, as that is the Twitter hashtag as well) on Tuesday, the response has been really quite interesting and overwhelming. Various people have written blogposts on the subject. As of this writing, I know of the following posts:

And there are dozens if not hundreds of comments on Twitter (#rppsi hashtag) as well as Facebook. I’ve also gotten dozens of direct messages, emails, and Facebook messages from various points of view.

On the whole, the responses trend negative, and for the reasons I laid out in the first post. Yet, despite the skepticism towards the #RPPSI initiative itself, the discussion as a whole is truly encouraging: REALTORS are finally engaging with each other on a topic that is critically important, learning some more details about what is going on, and debating pros and cons in a remarkably collegial way (for the Internet, anyhow).

I do have a few followup thoughts, now that I’ve had a chance to think about the initiative and my initial reaction some more. I think NAR is doing a very dangerous, if necessary, thing with #RPPSI. But with a simple tweak, it can become a great thing that would set up victory after victory for NAR, for homeowners, and for REALTORS.

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Mortgage Litigation on the Rise

I’ve been writing about the mess that is Foreclosuregate on this blog, on Notorious, and on AOL Real Estate. And something I worried about (yet predicted, hoping to be wrong) was that we’d see significant lawsuits against banks, servicers, and MBS sponsors brought by homeowners and investors.

Well, it appears that mortgage litigation rose significantly in Q4 of 2010:

Servicing litigation cases rose by 21 cases in the fourth quarter, from just five in Q3. Mortgage Daily reports that servicing was busier because foreclosure lawsuits in Q4 nearly doubled the amount from Q3 and modification activity climbed 208 percent.

Investor lawsuits also doubled from the third quarter, which the news organization surmises was because of a similar increase in litigation associated with mortgage-backed securities.

Even if we assume that the State Attorney Generals will reach a settlement with servicers, I don’t know that it would bar private litigation by homeowners and investors. There is a tipping point past which the big plaintiff’s law firms who take on mass class action lawsuits (mesothelioma, anybody?) get involved and start running radio and TV ads asking people, “Have you lost your home to foreclosure? You may be entitled to money damages! Call now!”

Of particular concern is the increase in investor lawsuits, as Antony Laura of Patton Boggs explains:

“While the increase in servicing cases is stark, the increase in suits by investors alleging missteps in the origination and securitization process is especially worth noting, as hundreds of millions of dollars are often at stake in those loan portfolio repurchase cases,” Laura explained.

Actually, it’s hundreds of billions at stake, and we enter the realm of systemic risk.

Oy. Otherwise, a cheery top o’ the mornin’ to ye, guvnor!


Should Social Media Be Taught to Everyone?

With great power comes great responsibility

I was reading some Facebook status updates — signifying that obviously, I’m not a total social media moron who hates all things social — when I came across an interesting little comment:

The post that Eric Bryant and Maya were talking about is this one by Jeremy Blanton. His conclusion:

I think in the case of these three the message is clear, social media can take your business and explode it to a whole other level. People realize the importance of social media in their business plan and it was evident by the packed classes that had anything to do with social media.

A lot of conversations — eternal ones, it appears — about social media as marketing is about whether it’s effective.  Maya Paveza, a good friend of mine who was on that panel, threw down on Mike Ferry recently because Mike disparaged the efficacy of things like Twitter and Facebook (well, and she thought he was rude).

But let’s have a different conversation, because I’m sort of bored with the “social media works/social media is fool’s gold” stuff. Let us take as given for this discussion that social media is the single most effective marketing strategy ever invented for real estate. Let’s assume that it will take a real estate agent’s business and explode it to the next level.  Okay? Okay.

My next question: should social media techniques be taught to everyone or kept secret for the chosen few?

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BREAKING: NAR Launches a Political Party, Risks Its Future

At the 2011 Association Executives Institute meeting in Dallas, NAR has put forth a bold if risky plan it is actually calling the “Political Survival Initiative“. In short, NAR will launch a “REALTOR Party” that will go beyond simple issue advocacy to full-blown political support for individual candidates based on issues NAR considers important (e.g., mortgage interest deduction, financial support for housing, state transfer taxes, etc.). Please view the presentation, the talking points memo, and the NAR legal memo on Citizens United if you are interested in detail. Or just keep reading then decide if you are interested.

My initial take is surprise combined with real concern. This Political Survival Initiative could either be the most brilliant thing that NAR has done in decades (having done little to nothing with HouseLogic, that is), or be the first step towards total irrelevance. It’s a big risk. I may have to revise my opinion about NAR 800K to something closer to NAR 400K, which is not necessarily a bad thing, but the face of organized real estate could change rather dramatically, and rather soon.

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