Notorious R.O.B.

I’ve seen quite a few posts of late suggesting that the housing market has finally hit bottom. Agent friends of mine are telling me about increased activity in their local markets, multiple bids on houses, low inventory, and so on. We have Stan Humphries of Zillow saying the Spring 2012 season should be positive. And none other than Calculated Risk, hardly a cheerleader for housing, has called the bottom on housing:

And it now appears we can look for the bottom in prices. My guess is that nominal house prices, using the national repeat sales indexes and not seasonally adjusted, will bottom in March 2012.

…

There are several reasons I think that house prices are close to a bottom. First prices are close to normal looking at the price-to-rent ratio and real prices (especially if prices fall another 4% to 5% NSA between the November Case-Shiller report and the March report). Second the large decline in listed inventory means less downward pressure on house prices, and third, I think that several policy initiatives will lessen the pressure from distressed sales (the probable mortgage settlement, the HARP refinance program, and more).

I’m working on the Redfin 3.0 post, but this was interesting enough that I took a short break from that to run some quick numbers. Maybe all these green shoots of positivity will indeed result in the housing market finally turning around. For a variety of reasons, I’m skeptical of such a thing, but I could be and hope to be wrong.

What I wondered about is whether this increase in housing activity, increase in prices, were actually just a reflection of higher inflation and inflation expectations. Well, there might be a way to measure that…

Enter GOLD!

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So many interesting items in the news these days. Last week has been a busy week for blogging. And it ended on a most interesting note. Following all of the excitement around Zillow and Howard Hanna and all that, I saw this news from Redfin:

Introducing Redfin 3.0: Redfin Becomes a No-Brainer

Redfin is proud to launch today a massive upgrade to its service, designed to ensure that each Redfin customer has a one-on-one relationship with his agent.

The Redfin agent who works with you throughout the touring and negotiating process now meets you from day one, sees with his own eyes the home you’re buying or selling, and attends the closing.

Because we believe this service upgrade is of the same magnitude as our decision to offer free unlimited home tours, known within Redfin as Redfin 2.0, we are calling this new service model Redfin 3.0

I thought this was interesting for a lot of reasons.

First, love ‘em or hate ‘em, Redfin has always been a truly innovative brokerage since it began. So many companies want to claim they’re innovative, that they think outside the box, and so on, but Redfin has actually proven it… to mixed results, to be fair, but they’ve walked the walk for years. Second, Glenn Kelman is what you might call a Big Brain; he doesn’t make whimsical moves. The tired and overused term “thought leader” applies to fewer and fewer people, but Kelman I think lives up to the moniker.

So I think Redfin has done the research, thought about the decision a whole lot, and then pulled the trigger after serious consideration.

And finally, Redfin has been, without a doubt, a technology pioneer in the brokerage world. They’ve been so advanced, in fact, that many brokers routinely think of Redfin as a web portal first.

So Redfin 3.0 is of interest. Let’s think about it some more, and think about what their moves might suggest the future of brokerages everywhere might be.

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That tagline is more meaningful today

Was it just yesterday when I was speculating on Zillow’s recent hiring of Bob Bemis? Why, yes, yes it was. How things change in 24 hours when you live in interesting times. [Editor's Note: Obviously, you started writing this on the 15th and didn't finish? Nice managing the deadline, Rob.]

Today, Zillow released their Q4/2011 results, which shows its full year results as well. The numbers are… shall we say… ah… scintillating given the state of the real estate market today? And there’s just so much here that points to the future of real estate, where the battle lines will be drawn, and what the next set of tensions will be.

I warn you now. This will be long and filled with the kind of “paranoid speculation” that makes most insiders guffaw with disbelief… until it happens.

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I can't believe I put up that post...

I know, my posts of late have been full of sturm und drang, and lots of big time industry happenings and futurism type of Nostradamus stuff. Yes, we live in interesting times… which can get tiring. Even for me. So in the way of self-diversion, I thought I’d write about a topic I haven’t touched in quite some time: blogging.

I did a really fun phone interview recently with a broker out of Jacksonville and a writer for Florida REALTOR magazine on the topic, and I hope the full article is all kinds of fun and useful. But there was one thing I told him that I thought would be fun and interesting to discuss.

What one thing could a typical real estate blogger change to dramatically improve her chance of success?

Read on, intrepid lector.

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The New VP of Partner Relations for Zillow

One could quibble with the title of this post. Someone could say, “Rob, you were paranoid long before any hiring of anybody happened” and I’d not have a whole lot to say in response. But first, the news.

ARMLS (Arizona Regional Multiple Listing Service), the fourth largest MLS in the country with over 32,000 members, posted earlier on its Facebook page that Bob Bemis, its CEO, had resigned to take a job with Zillow:

On February 13, 2012, at a Special Called Meeting of the ARMLS Board of Directors, Bob Bemis tendered his resignation notice as ARMLS CEO, to accept the newly created position of Vice President of Partner Relations for Zillow, Inc. in Seattle. Over his four years at ARMLS, Bob built a legacy of strong leadership, and is widely credited within the MLS industry with moving ARMLS to world class status.

Curiously, the next paragraph in the ARMLS announcement went on to talk about iMapp and Realist (two public records/tax data products that many MLS’s use), leading me to scratch my head a bit. Your CEO just resigned and you’re concerned about a tax data system?

And Zillow has now officially confirmed.

In any event, I’m fortunate to have gotten to know Bob both professionally and personally over the past couple of years, and my admiration of the man knows no bounds. He’s brilliant, funny, kind, with both an easygoing personality that endears him to so many people and a trenchant business mind that brought ARMLS to the next level. That Zillow not only landed Bob, but that it knew enough to court him in the first place makes me admire Spencer and company at Zillow. This is a win-win for both Bob Bemis and for Zillow. Congrats to them both.

Having said that, could I really be the only one who sees a brilliant master stroke here by Spencer, one with possibly very long and very profound repercussions? [Ed: Yeah, Rob, you probably are, because normal people aren't paranoid like you.] Oh well. So be it. I engage in phantasmagorical connect-the-dots once more.

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Oh jeez, not another post on syndication and IDX...

It’s late, and I’m fairly certain that this horse I’m about to pound on some more is long since departed for greener pastures in the hereafter… but hey, what the hell, right?

So by now all readers of Notorious ROB have seen the latest developments in the Syndication Serenade:

• Metrolist pulls IDX from Diverse Solutions, a unit of Zillow
• Sandicor Puts In New Rules for Syndication
• Northeast Florida MLS Stops All Syndication, Throws It Back to Brokers

This carousel is making me dizzy!

The responses from the peanut gallery are… well, predictable. You have the lamentations of the Transparency Mafia, the chortling of the KillZillThrill Cult, various declarations of how bass-ackwards the real estate industry is, and people who just love that the MLS is “fighting back”, and so on and so forth.

And yet, no one appears to be picking up on the most important trend here. So let me beat this dead horse one more time: brokers, REALTORS, vendors, Romans, friends, countrymen… it’s time to start making your plans for the post-IDX world.

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The average denizen of the RE.net cybercafe — that includes you, since you’re reading this on a blog — knows that the hot topic du jour is syndication. I wrote about it here and here already, but frankly, have been talking about this issue for quite some time. And influential bloggers like Jay Thompson and Kris Berg have weighed in, and Facebook groups are all over this issue.

And I’ve gotten a couple of phone calls, a number of emails, and Facebook messages and such debating my one critical issue with me. I wrote that the issue here isn’t syndication, which is more or less dead in its current form, but IDX. And that one cannot be against syndication but for IDX. Jay Thompson agreed, while Kris Berg (to take but one example) disagreed.

So I’d like to explore this connection more, to clarify why the distinction between syndication and IDX does not, and cannot, hold. And what that then means for the future of the industry, by connecting a couple of dots.

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Another brief update, before my day of continuous meetings begin….

Regarding my post yesterday on the syndication brouhaha brought on by Abbott Realty Group… first, you need to read Jay Thompson’s take on the subject. He takes longer to articulate the issue than I did, and I think more clearly than I have:

If you feel syndicators are harming consumers by making it difficult to contact listing agents, they you must, MUST, also keep  your listings out of IDX distribution. The exact same issue of not reaching the listing agent that seems to bother so many in syndication also exists in IDX.

Trust me, we get calls and emails – seven days a week – from people searching on this very site who think we are the listing agent for the property they are viewing. Every. Day.

Don’t get me wrong. I **LOVE** IDX. It’s the lifeblood of my prospect generation efforts. 6,742 IDX search registrations in 2011 is a great thing. But if one of your main arguments for pulling your listings out of syndication is because potential buyers are confused and can’t reach the listing agent, then you MUST also pull out of IDX. The same problem exists in both systems. You can’t have your cake and eat it too. Pulling out of syndication but using IDX smacks of hypocrisy.

The “syndication debate” will not end with smacking down TruZiltor. It will ultimately end up being a debate about buyer agency, the purpose of the MLS, the purpose of data-sharing. I’ve been predicting we’ll be doing that by NAR Annual in November. Maybe it’ll happen sooner than that.

I think that’s a wonderful, needed debate within the industry. Bring it on, I say, and sooner the better.

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I’ve been traveling — planes, taxis, automobiles — and blogging has been difficult. And I’m typing this out in a hotel lobby before my next meeting, so it can’t be my typical overlong post. But I had to comment and ask questions about the latest salvo in the 2012 Syndication Wars.

I predicted in my 2012 Predictions post that listing syndication would be the big issue this year. Sure enough, events do not disappoint. You have probably seen this announcement by Jim Abbot of Abbot Realty Group by now:

And by now, you’ve seen some industry reactions. For example, this post by Tara Steele over at AgentGenius (they go by AGBeat these days?). Or you can check out Inman News reporting on the story (premium content).

I only have a couple of brief comments and a couple of questions about this.

First, this sort of move by brokerages was entirely predictable… but did it have to be a brokerage named ARG that opens up the salvo in 2012? I suspect many people will be making that sound in the coming months.

Second, given the number of times that Mr. Abbott talks about how valuable the listing information is, just how important it is as “intellectual property”, and talks about how major publicly traded companies like Zillow and Realtor.com/Move could not survive without that intellectual property… am I the only non-REALTOR out there listening to that and wondering, “Hey, so all that information about my house is that valuable eh? Should I get any piece of all that valuable intellectual property action?”

Third, am I the only one that found it interesting that Mr. Abbott draws a fairly clear distinction between “our clients” and buyers? Of course, he does mention several times that if you’re looking to buy a house, that you should call Abbot Realty Group. But in a few moments, he makes it pretty clear that his clients are the home sellers, not necessarily the home buyers. This becomes relevant because…

The fourth, and most important point… actually, let’s make that a question. Listen to the message behind his outrage in the middle there (around the 4 minute mark). Listen to the substance of the complaint. Listen to him talk about irresponsible agents who don’t know the neighborhood, the development, sometimes steers the buyer into a property/area they do know, etc. The issue boils down to this critical phrase: “If you want honest, accurate information about a property, talk to the source.” Someone explain to me how that critical phrase does not apply with 100% force to IDX, please?

This is not the end of the syndication issue, and I’m out of time. So I’ll end this here, some 1800 words short of my average. But if you’d like, take a crack at answering that question, please. Inquiring minds wanna know.

-rsh

Lawrence Yun, the Chief Economist of NAR and my doppelganger, has a new post up in which he discusses the growth in global population:

In regards to the United States, some have claimed that the large number of people retiring and an eventual dying off of the baby boomers will mean less housing demand in the future. This ignores one simple fact about the broader population and not just the baby boomers. Every year about 3 million additional people live in the U.S. The projection by the Census further calls for more people for the foreseeable future with the total tally rising to 436 million by 2050 from the current total of 311 million people. Such growth assures steady housing demand.

…

The stabilizing population, according to experts, is to be around 9 to 10 billion people. Hard to think about what all this means. Demand for real estate is automatically created. But how many by that time will be able to say that they own a property of their own?

He ends by saying, “So imagine a condition where you see twice as many people around your local town and spatial area. Is that too much or it that absorbable?”

I’d say I’m one of those who have claimed that the large number of Baby Boomers retiring and eventually going to join the great Drum Circle in the sky would mean less housing demand in the future. So I find Lawrence’s line of thinking very, very encouraging: 3 million more people live in the U.S. every year. Hence, housing demand will be robust.

Maybe. But three things come to mind here.

First, global population growth is not U.S. population growth.

Second, housing demand as a function of population growth clearly ignores the very troubling trends in the generation most likely to replace the Boomers in the United States: the Millennials (or Gen-Y).

Third, the issue for real estate industry isn’t so much generic “housing demand” but what kinds of housing demand we will see.

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