July 29, 2008
BUBBLE HOUR: Slowest real estate sales since 1991 got you cheering or crying in your beer?
Sellers, does the same news have you crying in your beer, prepared to drop your price again, or tempted to drop your real estate agent (once your listing contract expires, of course) and try "for sale by owner" this Fall?
If you're one of the 15,000 sellers across Massachusetts who's listing has already expired, been canceled, or temporarily withdrawn from the MLS during the past two months, The Real Estate Cafe is eager to talk to you about selling for sale by owner, or help you evaluate and select your next listing agent.
We've just returned from LIVE BLOGGING the leading real estate technology conference in San Francisco, and are eager to demonstrate new money-saving tools and web sites. Do-it-yourself home buyers and sellers, would you like to see those demos in a small group or a personalized one-on-one presentation? We're eager to take advance reservations for a "FSBO Cruise" in Boston Harbor aboard the Yacht Starship: $99 includes a private, one-on-one presentation of our "FSBO on Steroids" seminar plus a lunch buffet with four-star cuisine.
Sellers: we don't see the housing bubble through rose-colored glasses, so if you are intimidated by selling "for sale by owner," The Real Estate Cafe can prepare a "Listing Agent Report Card" instead and try to negotiate a reduced commission. If you pay in advance for our analysis, we'll rebate one-third of our referral fee.
July 20, 2008
Part II: Million Dollar Markdowns coming to a neighborhood near you?
Follow-up to Part I: Housing slump hits Cambridge: 1 in 3 single family homes selling below assessed value
As graphed in the blog post above, homes selling below assessed value are increasingly common, but what was newsworthy about the Boston Globe's story last week is the magnitude of how far below. During the first six months of 2008, two homes in Cambridge sold for approximately $2 million below their original asking price. More significantly, both sold for more than $1 million below their assessed value based on our analysis of MLS data shown below.
Can you guess the address of these two properties in Cambridge?
Original asking price: $5,300,000
List price before offer accepted: $3,700,000
Price reduction Original vs list price: $1,600,000
Final sales price: $3,100,000
Price reduction below last asking price: $600,000
$2,200,000 Savings vs original asking price
% Savings vs original asking price: 42%
Assessed value: $4,122,100 (2007)
Saved vs assessed value: $1,022,100
Sales price / town assessment: 75%
% below assessed value: 25%
Guess how many days on market?
Are you seeing Million Dollar Markdowns in your local housing, elsewhere in Massachusetts, the US (or world)?
Original asking price: $5,500,000
List price before offer accepted: $3,995,000
Price reduction Original vs list price: $1,505,000
Final sales price: $3,650,000
Price reduction below last asking price: $345,000
Savings vs original asking price: $1,850,000
% Savings vs original asking price: 34%
Assessed value: $4,917,400 (2008)
Saved vs assessed value: $1,267,400
Sales price / town assessment: 74%
% below assessed value: 26%
Guess how many days on market?
As reported by the Boston Globe, The Real Estate Cafe has monitored "Million Dollar Markdowns" -- luxury homes which have sold at least $1 million below their original asking price -- on and offer during the past. See links in blog posts from 2007: Sweetest Deals of 2006 and MIT Professor: Housing prices could decline another 20%.
As McMansions become less desirable and the housing market drags the economy in recession, do you think "Million Dollar Markdowns" will become more common in your local housing market? Are owners already putting them on the market now to minimize their losses? Will the expiration of estate tax cuts enacted in 2001 cause the luxury housing market to collapse, or will Congress and the new president extend the tax cuts permanently?
July 17, 2008
If airlines have fare sales, should real estate agents? Part 2
Poking fun at the current cover story in Barron's Magazine, "Bottom's Up: This Real-Estate Rout May Be Short-Lived," Bill Apgar of the Harvard's Joint Center for Housing predicted, "There will be 10 articles a month [like that] until we hit the bottom, and the last one will be right."
When will it be the right time to buy? That's what all The Real Estate Cafe's clients are asking. Some of their house hunts began two years before the market peaked, and are now into the third year of falling prices. Nearly 50 of our active buyers have looked at more than 1,000 MLS page views. Twenty-one have looked at more than 1,000 MLS pages in the past year alone, but only four of them have paid any fees to The Real Estate Cafe.
Unlike listing agencies who represent sellers and charge 5% to 6% commissions, or dot.com start-ups that are venture funded, The Real Estate Cafe pays it's overhead almost entirely from hourly consulting fees paid by clients. With so many buyer waiting out the housing bubble, those fees have slowed to a trickle. Now, after 13 years, we need your financial support.
We constantly look for ways to help you save money, by learning more about the housing bubble and the latest technologies. Today, for example, we attended a seminar on State of the Nation's Housing and a Foreclosure Prevention Workshop. This weekend, we'll participate in PodCampBoston (for the third time.) Next week, we'd like to participate in two real estate technology conferences in San Francisco: REBarCamp and Real Estate Connect.
To do so, we need to raise $2,000 to $3,000 quickly. You can help us, help you save money by selecting one of the following special offers:
Money-saving offer #1: Fare sale
Repeat the Fare Sale we used successfully in 2007 to get two to three clients to prepay $500 to $1,000 in exchange for 1 to 3 hours additional work for FREE. Email for details.
Money-saving offer #2: Experiment with monthly fees
Introduce an optional monthly subscription fee. If you agree to pay $250 per month, we’ll slash our our consulting fees, normally $100 to $150 per hour, to $50 per hour for five hours—that’s a savings of 50% to nearly 70%! Like frequent flier miles, hours you prepay accumulate and you can use them any time you like. Email for details.
Money-saving offer #3. Attend educational seminars
Host a technology debriefing after our trip to San Francisco to share best money-saving tools and tips from the two real estate technology conferences. We would like to host two events, one for buyers and the other for FSBOs ("for sale by owner") within 10 days of the conferences at TogetherInMotion, One Broadway, Arlington, MA. $49 per household, per event. Email for details.
Finally, your best savings opportunity may already be part of our normal menu of fees & rebates. For example, one of our $3,000 flat fee options enables you to buy down our hourly consulting fee from $150 per hour (without retainer) to $75 for 40 hours - that's a 50% savings before payment of any performance bonus. (Contact us for more details on this option and others.)
We encourage buyers to wait for the housing prices to correct, but don't wait to take advantage of these savings opportunities. Once we raise $2,000 to $3,000, they'll be gone.
10:25 PM in "We" companies, Bubble Hour, Client Feedback, Fee-for-service, FSBO: Best Practices, Housing forecasts, Inside The Real Estate Cafe, Price trends, Real Estate Bubble, Savings & Rebates, Tech Trends, Timing the market | Permalink | Comments (0) | TrackBack
July 16, 2008
Fee-for-service real estate: professional advice without cartel pricing
More than a decade after the former chief economist of the National Association of Real Estate said...
"The next major revolution in real estate will be fee-based services replacing the blanket commission pricing that has dominated the industry for so long."
...it's discouraging to see this debate reduced to two options:
"There are two general ways to sell a piece of real estate. You can do it yourself (usually known as doing a for sale by owner, or FSBO), or you can utilize the services of a real estate agent."
There are dozens of tasks in both the home buying and selling process that web-savvy real estate consumers can purchase "a la carte" to meet their specific needs, without incurring a five to six percent real estate commission.
IMHO, presidential debates should not ignore credible third party candidates, and this residential debate should not exclude alternative fee-for-service business models either. Those business models -- together with long overdue industry reforms -- will enable buyers and sellers to save billions of dollars annually without sacrificing the benefits of professional advice.
If you live in New England and would like to join our experimental "FSBO Support Group," please contact us by phone (617-661-4046) or email.
09:35 AM in Commission Reform, Fee-for-service, FSBO: For Sale By Owner, Real Estate Consumer Bill of Rights, RECALL: Real Estate Consumer Alliance, Savings & Rebates, Unbundling the Commission | Permalink | Comments (1) | TrackBack
July 15, 2008
Part I: Housing slump hits Cambridge: 1 in 3 single family homes selling below assessed value
Part I: On Sunday, July 13, 2008, the Boston Globe published a lead story in City Weekly entitled, In real estate sales, not all cities are equal.
A blog post earlier today by Redfin stated that "several single-family houses sold for less than the assessed value" in Cambridge, but the magnitude of the price correction underway is far more substantial. As shown in the graph above, approximately one in three single family homes sold below their assessed value in Cambridge during the first six months of the past two years. (The Real Estate Cafe's analysis was limited to the first two quarters of each year because we assume that a higher percentage of homes sell below assessed value during the second half of each year.)
The Real Estate Cafe first began tracking sales below assessed value during the first quarter of 2006; and by September 7, 2006, our research was featured in a Boston Globe story entitled, "Priced below assessment." Contrary to Redfin's assertion that "a house would have to be ravaged by fire" to sell below assessed value, a map in the Globe story revealed that 37% of the single family homes sold in Brookline were below assessed value, compared to 22% of the single family homes sold in Cambridge at the time. (Click for sample of the homes selling below assessed value in Brookline in the past.)
Two years ago today, our first user added their own examples of falling house prices to our interactive real estate bubble map. Inman News also featured our map in a mini-series on Real Estate 2.0 innovations, and we need your financial support to attend their real estate technology conference next week to continue our 15 year tradition of helping real estate consumers save money.
Preview of Part II: Homes selling below assessed value has clearly become more commonplace, but what was newsworthy about the Globe's recent story is the magnitude of how far below assessed value: During the first six months of 2008, two homes in Cambridge sold for approximately $2 million below their original asking price; and more significantly, more than $1 million below their assessed value (based on our analysis of MLS data. Watch for more details this week.
July 08, 2008
Bubble Hour topic: Money magazine forecast 10.5% decline, SF home prices in Boston by May 2009
Glad to see the pundits agree with the people, again. Boston buyers - interested in a Bubble Hour to discuss this forecast in Money magazine's Real Estate Survival Guide, summarized today on Boston.com's real estate blog:
Boston is forecast to see a 10.5 percent decline in single-family home prices by May 2009. While that's slightly higher than the projected 9.7 percent decline for the nation overall, there are 35 metropolitan areas expected to see bigger declines. In the past five years, prices had increased slightly more than 13 percent in the Boston area, according to Money's calculations.
The other four areas included in the list are also expected to see price declines: Cambridge (8.5 percent); Peabody (8.8 percent); Springfield (9.5 percent); and Worcester (9.2).
Open to suggests on when and where to host this Bubble Hour, as well as future gatherings and topics. Follow http://twitter.com/RealEstateCafe for updates on time and place, as well as other BUBBLE BITES. Watch for link to upcoming story on slowdown in Cambridge housing market, too. Preview of market stats and custom research available "a la carte." Call The Real Estate Cafe at 617-661-4046 or email for details.
July 04, 2008
Organizing real estate rebels, educating home buyers & sellers
Richard Howe's blog post, "Urban Rebels," provided a timely opportunity to use the 4th of July to update our rallying cry for a consumer revolution in real estate. Howe is Register of Deeds for the Middlesex North District in Massachusetts, and has written extensively about foreclosures and their impact on neighborhoods and communities.
Excellent, timely post. With three million households behind on their mortgage payments, and a projected two million headed towards foreclosure, could the time finally be ripe for a consumer revolution in real estate?
Some of use have been talking about that for more than a decade, but as Glaeser writes, industry insiders have had "strong incentives to fight for their regime.” (See WSJ editorial originally entitled "The Realtor Racket" and download study on "Bringing More Competition to Real Estate Brokerage.")
Collaborating with fellow real estate change agents, we hope to invite home buyers and sellers in Greater Boston to restart conversations begun 15 years ago at the “Consumer Revolution in Real Estate” at our experimental new location: One Broadway, Arlington, MA.
We’ll experiment with seminars, real estate round tables, and web site demos. I’m particularly excited about reviving our Bubble Hours and hosting support groups for FSBOs & households facing foreclosure. Perhaps you can join us at an upcoming real estate unconference, or even present a topic / lead a discussion.
11:13 AM in "We" companies, Bubble Hour, Change Agents, Commission Reform, Foreclosures, FSBO: For Sale By Owner, RECALL: Real Estate Consumer Alliance, Social Networking | Permalink | Comments (1) | TrackBack