Counter Intelligence: The Real Estate Cafe Weblog

Best site to identify commuting costs & hassles, in good weather & bad?

Earlier today, Bryan Person launched a wiki called Awful Commutes.  Right now, it seems to be focused on collecting stories from yesterday's snow emergency in Boston which unexpectedly turned commuting into winter sport.  No need to limit the wiki to accounts of those 5 and 6 hour marathons.  Three years ago, I thought about moving to Lowell, MA but decided to stay in Cambridge because I could walk to so many important places in my life. My understanding is that Walkscore.com helps potential homebuyers identify the most "walkable communities."

Not everyone has the option to live in a walkable community, hence the need for a decision-making tool that helps home buyers evaluate communities -- and specific listings -- based on their household's commuting needs.  Does such a tool or site already exist? If so, what's the best one to use to assess the cost of commuting in Greater Boston, and hassles factors on alternative routes?  Do "best of breed" commuting sites already include wikis?  If not, hope Awfulcommute.pbwiki.com becomes the commuting equivalent of RottenNeighbor.com, at least here in Boston.  I'd certainly recommend that kind of interactive tool to The Real Estate Cafe's 'do-it-yourself" home buyers.

If Bryan's wiki continues to focus on winter commutes, wouldn't it be fun to ask readers who are old enough to contribute memories of the Blizzard of '78? Maybe some can offer first person (no pun intended Bryan) accounts of their commutes yesterday and 30 years ago.  Is anyone already planning something to commemorate the 30th anniversary of the Blizzard of '78 in Boston next year?  (I lived in Montreal at the time of the storm, but was amazed by the size of the snow drifts when I visited two weeks later. Nothing like today's relatively quick meltdown.)

Will homebuyers create their own "Twitter posses"?

Thanks to PBS.org's Idea Lab for introducing me to the phrase, "Twitter posse."  Their vision of reporters asking questions via Twitter reminds me of Real Estate Cafe blog posts about "home buyers turned embedded real estate reporters."  Three years ago, February 11, 2005, we said:

"...our goal is to help seed a new generation of "embedded real estate reporters" or citizen journalists."

A more pointed question, "Will mobloggers pop the real estate bubble?" followed on April 17, 2005, four months before the housing market peaked in Massachusetts and a year before we invited bubble bloggers and citizen journalists to contribute to our Real Estate Bubble Map.

We've only begun to scratch the surface of potential uses for Twitter in real estate, so why limit brainstorming about Twitter Posses to reporters?  Just substitute the word "home buyer" for reporter in the original Idea Lab post and you'll see that "homebuyer posses," "househunting posses," or "neighborhood posses" could become commonplace:

A potential home buyer could enlist a dozen or two dozen passionate, driven home buyers to serve as a kind of Twitter posse. Whenever she was about to tackle a big story or difficult interview, the home buyer could begin a mobile dialogue with fellow home buyers.

What I like about the concept: It brings a much-needed air of transparency to the house hunting process.  It expands the home buyer's field of vision.

Combine that with interactive mapping, or add Twitter posts to our Real Estate Bubble Map, and consumers could create a powerful new way to share market insights by typing 140 character messages into their smart phones as they tour open houses, drive through new neighborhoods, etc.

Any home buyers or sellers in Boston or elsewhere already using Twitter?  Any real estate professionals, particularly buyer agents, already organizing "househunting posses"?  (Any developers want to work on the idea?)  Post examples below, or @realestatecafe on Twitter.  You can follow our latest Tweets on our blog, or http://twitter.com/realestatecafe

Mapping credit crunch casualties in Boston & beyond

Inspired by today's Boston Globe's cover story entitled, "Mortgage crisis may hurt sales this fall" and it's ominous subtitle -- "More buyers likely to be refused loans" -- The Real Estate Cafe is eager to begin adding credit crunch casualties to our award-winning real estate bubble map.  Our first location has had three offers fall through over the past five months, including one last week.  If we could mobilize an army of would-be homebuyers turned investigative reporters, we'd map several categories of credit crunch casualties:

• Properties "back on market" (both MLS listings and "for sale by owner")
• Buyers whose loan applications are refused
• Prices that are renegotiated after properties fail to appraise
• Canceled transactions because would-be buyers cannot sell their existing home

Will it be possible to identify and document enough case studies to create a credible "credit crunch map" or at least a subset of our existing real estate bubble map?  We're not sure, but the financial reward of such a collective effort could be substantial:  depending on one's price range, patient home buyers in Boston could save $10,000 to $25,000 per month over the next four to six months.  In the meantime, we're willing to compensate clients who contribute content, see our Tipping Policy.

We agree:  "an amazing scene [is] developing;" and we're eager to see if interactive mapping can help translate credit crunch casualties into clients savings.  As the Globe wrote, "sellers who fear financing problems may jeopardize a deal are reducing their prices," and "Buyers 'are aware they have more choices, and down the line, their choices may increase exponentially...' "

Related post:  Summer slump of 2007:  For every 2 sales, 3 listings failing in MA

Comments welcome below and / or in The Real Estate Cafe's Idea Bar.

Fee-for-service real estate, not fee-for-research (yet)

We're a bit embarrassed about asking our clients and others to ChipIn to pay for our attendance at a real estate technology conference, but as one of nation's first and leading fee-for-service real estate consulting firms the slow housing market has reduced cash flow at The Real Estate Cafe. We haven't charged for access to cutting edge market research in the past, but we may be forced to experiment with "fee-for-research" in the future.

To date, we've done the opposite -- we've paid clients to add content to our Real Estate Bubble Map!  Their collective efforts helped us earn Platial.com's "Best Real Estate Map" Award for 2006, and the map was featured in an international conference on the future of journalism. 

Visit our map of homes selling for below assessed value in Greater Boston to learn more about our "Tipping policy."

TRAVEL ALERT:  Our plane to San Francisco leaves in three hours, so we're offering new and existing clients a variety of financial incentives -- like signing bonuses and reduced hourly rates from our normal menu of fees & rebates -- to help pay for travel expenses.  Call 617-661-4046 for more details.

MIT Professor: Housing prices could decline another 20%

Savings of $100,000 or more on individual home purchases were relatively common across the top 25 most expensive housing markets in Greater Boston in 2006, and according to one MIT professor, savings are likely to continue in 2007.  Professor William C. Wheaton predicts housing prices could decline another 20 percent in Greater Boston and other markets over the next two to three years.  Does that mean that homebuyers in the most expensive communities will see even more price reductions in each of these categories in 2007?

PARTIAL MAP of homes selling for more than $100,000 below their original asking price: (see technical note below)

• Saved $100K to $199K
• Saved $200K to $499K
• Saved $500K to $1 million
• Saved $1mil to $2 million
• Saved $2mil to $3 million
• Saved over $3 million

As sales prices fall, well-informed sellers are could set more realistic prices so the gaps between the original asking price and final sales prices may not be as wide as those recorded in 2006.  We'll continue to map the location of six figure savings, and invite you to do the same on The Real Estate Cafe's award-winning interactive bubble map.  We're so convinced that our clients will save money, we're willing to base part of our compensation on it.  Contact us at 617-661-4046 or RECafe [at] Mac [dot] com for information on our experimental NEW fees and rebates options.

Technical notes:  (1) Savings based on difference between original asking price in MLS versus final sales price.  (2) If property was listed more than once, actual savings may have been greater.  (3) Properties mapped represent a partial sample based on 25 of the most expensive cities and towns outside the City of Boston, and a limited number of months during 2006.  (4) Only homes which sold for BELOW assessed value are mapped, thus many other homes which sold for more than $100,000 below their original asking price are not mapped.  (5) Neither are active listing priced $100,000 below their original asking price, or three classes of properties which failed to sell in 2006:  expired, canceled, or withdrawn listings. 

The Real Estate Cafe provides additional data and research to clients on a fee-for-service basis.

Tracking properties "Priced below assessment"

Welcome Boston Globe readers and others who want to see where properties have sold recently for below assessed value.  Here are three quick links, but first a few key points:  we assume our readers know more about their local housing markets than we do, so we invite you to add your comments, post additional properties, or contribute to our wiki.  You can sign-up for updates via RSS or email (FeedBlitz).  If there is interest, we'll host our next Bubble Hour this weekend at PodCamp Boston to share insights and record some.  We'd like to begin adding audio and video clips to the bubble maps below:

Boston Bubble Map
Cape Cod Bubble Map
RealEstateBubbleMap.com

In coming days, we'll also explain how we started mapping sales below assessed value, add approximately 100 more sales from August 2006, and explain how clients can earn commission credits by adding properties, too.

Want to submit some "bubble comps" with your offer?  "Grab" what you need, and place them on your own map (we can explain how).  For more information or to record your thoughts for our Real Estate Bubble Audio Time Capsule, contact The Real Estate Cafe at [email protected] or 617-876-2117.

CAUTION: You are entering "The Bubble Spin Zone"

"You're traveling to another dimension, a dimension not only of sight and sound... but of mind. A journey into a wondrous land, whose boundaries are only that of the imagination... you're entering... the Bubble Spin Zone."

Reading some assessments of the current Massachusetts housing market, one wonders if industry spokespersons are taking their cues from Rod Serling classic, "The Twilight Zone."  Arguing "that prices are not declining sharply in response to falling sales," one recently told the Boston Globe that "I'm seeing some concessions from sellers, but not a whole lot."  Last August when the same spokesperson was asked by WBZ-AM radio talk show host Paul Sullivan if buyers were in danger of buying at the height of the market, he said no.

So, to help inform homebuyers and protect them from overpaying in overvalued housing markets, The Real Estate Cafe has developed an interactive map to involve homebuyers (and fellow buyer agents) in the process of documenting falling housing prices, in Massachusetts and beyond.  Beyond price concessions, we are particularly interested in mapping sales below assessed value.  Would you believe that some buyer agents first began chatting privately about homes selling below appraised value this time last year?

If you are actively looking for a home, please visit our real estate bubble map before making an offer.  Working with site users, we've already mapped nearly 300 properties sold recently below their assessed value in 27 of the most expensive cities and towns in Greater Boston.  We assume our readers know more than we do, so we've made it easy for you to post comments, add new properties, or start your own local bubble map.  Some consumers have begun documenting sales below assessed value in highly desirable towns like Cambridge, Brookline, Newton, and suburban communities near Route 495.

Shortly, we'll add another 150 sales below assessed value which occurred during the past six weeks.  Some of the properties already mapped have sold for at least $100,000 off, but don't let that cause you to rush into an offer.  The largest price reductions could be between Thanksgiving and New Year's Day; when historically, one in five properties sells for at least 10 percent off.  This year, we'll track how many sell for 10 percent below their assessed value, but we'll need your help to do it.

If you're one of our paying clients in Massachusetts, we'll reward you for each property you add to the one of our regional bubble maps.  See our Tipping Policy for more detail. (Get it?  Real Estate Cafe, Tipping policy?)

Bubble Map comments reveal surprising price corrections

It hasn't taken long for the Real Estate Bubble Map's first user to go from their first post to their first dozen as shown on the image above and their interactive "places" map.

If you visit their map and view the properties, you'll read some interesting comments including two favorites: (1) A stunning $530,000 gap between a 2005 assessment and 2006 sales price; and (2) a long post comparing the present market to pre-9/11 slump).  After logging-in, you can write your own comments, add your own properties, or create your own map. 

Thanks to WestSideBubble and another new user, SoldAtThePeak for their thoughtful contributions.  We're open to your ideas about how to use this experimental map and wiki to protect homebuyers in overheated housing markets, in Boston and across the US.  Over the next ten days, we'll add another 119 properties to the Boston bubble map showing locations of homes sold below their assessed value in Greater Boston during June 2006.  Your contributions are welcome, too.) 

1st user documents falling housing prices on Bubble Map

The first user has added two local properties to an experimental Real Estate Bubble Map created by The Real Estate Cafe to involve consumers in the process of tracking falling housing prices.  Located at 21 and 30 Walker Street in Cambridge, Massachusetts, the contributions document an emerging trend:  both sales prices and asking prices are falling below assessed values in once overheated housing markets in Greater Boston.  Despite the prevailing myth is that housing prices never fall in Cambridge, the city is among 66 housing markets that have experienced significant price corrections over the past two decades.  21 Walker St. sold recently for approximately $150,000 below its assessed value; and the asking price at 30 Walker St. has fallen more than $110,000 below it's assessed value.  That property went under agreement in 11 days in 2003 when it sold for $1,275,000.  After six months on the market, the asking price is now $50,000 less than the sales price three years ago.  (See comments on map for more detail on both properties and approximately 150 others in Greater Boston)

Both Walker Street properties are in walking distance to Harvard University, where an "Un-Conference" on Citizen Journalism will be held, Monday, August 7, 2006. It is hoped that other house hunters will create local bubble maps to protect fellow home buyers from overpaying in "extremely overvalued" housing markets nationwide. 

Coauthoring the opposite of crime maps

Reading MLPodcast's interview with Platial.Com Co-Founder Di-Ann Eisnor, what excites me about Platial is the opportunity for anyone to map what they LOVE about their neighborhoods and communities.  As housing markets slide into downcycles across the country, consumers will make homebuying decisions less on financial return and more on quality of life.  That's where interactive, community mapping comes in.

But the transparency that Web 2.0 enables also comes with a "dark side," so here's a challenge / invitation: 

It's discouraging for me to see how much attention the Chicago Crime map is getting, not because it isn't a brilliant web 2.0 application but because it focuses on the worst of humanity.  Some of us have begun to talk about creating the "opposite of crime maps."  If there are dozens of types of crime that can be mapped, shouldn't there be at least that many ways to map "social capital" or good old-fashioned neighborliness?

My guess is that organizations like NeighborWorks have already created a typology of community assets, but wouldn't it be fun to invite ordinary people, like those Platial attracts, to help create some kind of "folksonomy" of tags that capture the friendliness, uniqueness, and richness (measured in generosity of spirit not housing values) of their neighborhoods and communities?

If others are interested, two dates might be considered for organizing such a grassroots campaign, which could include both real estate consumers and professionals:

1.  Dan Gillmor, author of We the Media and founder & director of the Center for Citizen Media, is convening a Citizen Journalism Un-Conference in Boston / Cambridge at the Berkman Center for Internet & Society at Harvard Law School on August 7, 2006; and

2.  A week later, August 14th is the halfway point to Valentine's Day.  Maybe it's never been celebrated before, but why not create a day to celebrate summer romances?  It's no accident that Platial attracts hopeless romantics, so why not use that date to invite neighbors to say what they LOVE about their communities, too?  (Afterall, Worcester, Massachusetts is the home of the modern Valentine in America and both the novel and movie, Love Story, were set at Harvard Law School, so why shouldn't Cambridge be the birthplace of the first annual celebration of Half Valentine's Day?)

Could be a great way to begin aggregating "the opposite of crime maps" around the country or at least a demonstration project here in Boston / Cambridge in conjunction with WikiMania.