Counter Intelligence: The Real Estate Cafe Weblog

Flames of "irrational exuberance" burning Realtors, too

I've spend the morning deconstructing Realtors are not immune to foreclosure, an amazingly transparent blog post on a leading real estate web site. The author's concluding question -- Why did so many people, including Realtors, buy homes in 2005? -- has been and will continue to be the spring board for innumerable blog posts, talk show interviews, research by economists and parodies on YouTube. But now imagine what the authors of Freakonomics or Saturday Night Live could do with this admission that some real estate agents "helped people buy homes that they could not afford," and then repeated the same mistake themselves.

Personally, I'd love to see investigative reporters dig into the conflicts of interest in the real estate industry and expose how deceptive and manipulative business practices, like dual agency and blind bidding wars, fanned the flames of "irrational exuberance" and, as this highly respected blogger admits, ultimately burned Realtors themselves.

Perhaps industry regulators will create new disclosures to protect consumers and prevent another trillion dollar collapse of the housing market in the future. Were you aware that a Washington think tank estimated a "loss of almost $6 trillion in real housing wealth over the course of the year, an average of $85,000 per homeowner"? Historically, potential home buyers have been advised to ask agents about their sales volume, but now it's wiser to ask prospective buyer agents if any past clients are upside down on their mortgages or involved in foreclosure. What if a such a negative equity or "foreclosure disclosure" were required by law?

Outrageous some might scream, unrealistic others would argue but blogs have already created a decision-making tool for web-savvy home buyers to decide who will best protect their financial interest. Try this experiment, visit two real estate blogs and see what their authors have written about the housing bubble. Look at their posts during 2005 -- was your prospective buyer agent echoing NAR's "anti-bubble" spin or warning homebuyers about the coming meltdown?

In retrospect, this Real Estate Cafe blog post from April 2005 sounds prophetic: Will mobloggers pop the real estate bubble?

My hope is this blogger's admission that Realtors are not immune to foreclosure will expand discussion about systemic flaws and conflicts of interest in the residential brokerage practices, and their cost not just to individual buyers and Realtors but to society. Who could imagine a better time and place for some "straight talk" about the need for real estate reforms than John McCain's speech tonight at the Republican Convention in this blogger's backyard?

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

Homebuyers: Help map falling prices to protect yourself from overpaying in "overvalued" markets

The map may take a couple seconds to load.

UPDATE: Added wiki-version of national RealEstateBubbleMap.com. Contributors welcome.

A year after The Real Estate Cafe speculated about whether bloggers would help pop the real estate bubble, househunters turned citizen journalists now have the opportunity to use online maps to move past theories and debates, to document price reductions, pre-foreclosure notices, and properties selling for below their assessed value.  This map, for example, shows some of the largest recent savings in Greater Boston.  Interested in using Platial to create real estate bubble maps in "overpriced" housing markets across the nation? Here are three options: 

1.  Register to use Platial so you can add "Places" to the Boston regional map above.  It's easy to add a new property, post comments on an existing one, and upload photos to any Place whether it is yours or not.  Videos and audio clips can be embedded in the descriptions of the Places you add.  To republish this map on your website, click here and simply cut and paste the html. The map can be re-sized to fit any page layout.  Contributions from fellow bubble bloggers and their readers, particularly those in 71 cities called "extremely overvalued" by USA Today are welcome.  Want to correspond with each other and become bubble buddies?  Start by adding your comments to the Boston bubble map or this national map / wiki of overvalued housing markets.

2.  If you want us to do the work, send comments, corrections, or references to other properties asking or selling for (1) below their assessed value or (2) well below their original asking price to [email protected].  Links, photos, videos, and audio clips are welcome, but addresses or intersections are required to map locations.

3.  Create your own local or regional map on Platial, and add or "grab" Places from other maps. Then let others add to or republish your map to create an informal, grassroots network of housing bubble maps.  Sound cool?  That's what others say about Platial: read Wired's article, or listen to a story about the site from NPR's All Things Considered.  Check out the repeated references to Platial and social networking with maps (watch video clip) at the Where 2.0 Conference News site this week. 

What's in it for you?  Post enough new places to your own map, and Platial will share advertising revenue.  Or simply use information others post to stay informed, protect yourself from overpaying for property, or negotiate a lower price by linking your offer to recent sales, price reductions, etc.  Maybe we can even get foundation money to create an initiative to help inform and protect homebuyers like you. 

Meanwhile, if you need a buyer agent in Greater Boston, The Real Estate Cafe would be delighted to serve you and rebate some or all our commission. If you are househunting outside Boston, we'd be delighted to refer you to an exclusive buyer agent -- perhaps one contributing to this map -- and rebate one-third of our referral fee (where allowed by law), and donate another third to the proposed Million Dollar March to help save lives or provide shelter subsidies for AIDS orphans.  With more than 15 million AIDS orphans worldwide, let's use today, Father's Day, to begin brainstorming about how to build a voluntary, nationwide campaign.

What's in a [real estate blog] name?

The excerpt below was sent to a fellow real estate blogger in San Francisco who wanted to know why The Real Estate Cafe named it's blog, "Counter Intelligence:"

"Over the past decade, we've used a handful of restaurant metaphors to communicate that we provide services to our clients "a la carte," and that we've encouraged our customers, clients, and any others to share their perspectives peer-to-peer to get a more insight into what's really happening in different segments of the real estate market in Greater Boston and beyond. 

In cafes, those kinds of conversations usually occur over coffee tables and sometimes at lunch counters.  Since the real estate industry puts out so much self-serving spin (see our recent blog post on the National Association of Realtors anti-bubble reports), we felt it is important to provide a forum for alternative perspectives, hence the name "Counter Intelligence." 

Call it anything you like, we're delighted when anyone visits our site, and doubly delighted when they share their opinion in writing or by calling our reader line, 617-876-2117, and recording a brief sound bite [for our real estate podcasts]. 

Blogs and Citizen Journalism in Real Estate

One of The Real Estate Cafe's first posts was in February 2004 fifteen months before Business Week's cover story today, in response to a debate among blog gurus at Harvard about where blogs would strike next: 

"Despite the setbacks to Howard Dean’s first-of-a-kind Internet operation, the current discussion around the Blogosphere seems to be centered on when and where the next major impact point will be, and not whether the Internet will be an important player from this point on in the American political panorama.

...there is a sea change in the air, and some of the bulwarks of conventional control of the information stream are crumbling under the relatively free-form innovations from the digital frontier."

The February 2004 post continued, "This is where blogs might find an entry point in the real estate industry. As you know Ralph Nader and Steve Brobeck of the Consumer Federation of America both called the real estate industry a cartel more than a decade ago. One of my visions is a network of home buyers who post reviews of open houses and report on local market trends from the consumers' perspective. As the air comes out of the real estate bubble and the industry slides into a multi-year downcycle, home buyers will become increasing cautious and hungry for this kind of 'citizen journalism.'"

Fifteen months later, it's no accident that one of the Business Week articles featured Curbed.com, the leading real estate blog in New York if not the nation, because "[it] dishes the dirt the brokers don't." Explaining the popularity of his blog, founder and former Massachusetts resident Lockhart Steele told BW, "People trust blog posts more because they sound like e-mails from a friend."  Since it's founding in May 2004, Curbed.com's traffic has soared to over a million page view per month.

Will mobloggers pop the real estate bubble?

Yesterday's conference on Grassroots use of Technology at MIT has reenergized my interest in moblogging in real estate.  Will the prevalence of iPods, smartphones, and digital video recorders create a new generation of house hunters turned citizen journalists?  Not if the decade-long, lemming-like rush continues to cause home buyers to view each other as competitors, is my guess.

But if the housing market begins to slide as real estate bubble watchers caution, buyers may look to each other for information about what is really happening in the marketplace rather than traditional real esate agents / listing agents who are obligated to get the highest price for sellers and continue to fan the flames of "irrational exuberance."

How will those peer-to-peer exchanges occur?  Will those amatuer roving real estate reporters begin to post their own comments in writing, audio clips, or video clips to the web?  Those are the kinds of questions I would like to explore in this discussion of "Moblogging in Real Estate." 

In addition, I'd like to use the forum to experiment with my own attempts to learn each of the means of communicating above.  I am particularly interested in experimenting with Podcasts and Videoblogging, and seeing how VR images can be incorporated into blog posts to give real estate consumers richer information than otherwise possible from look-alike listing sites published by over a million real estate agents nationwide.

Here's one attempt at posting a VR movie in Quicktime.  Does it load on your site and are you able to rotate the VR image with left or right with your mouse?  Need to learn how to make my videos load online... anyone else in the real estate community -- or any home buyers or sellers -- experimenting with moblogging?

Download top2_030205.mov (296.4K)

Moblogging After Home Builders Show

After attending the BuildersShow.com in Orlando, I flew to South Beach and video taped some of the nightlife using my new Treo 650.  Steve Garfield, a leading video blogger in Boston was so impressed with the quality of the Treo 650 video that he posted it online at his VSPAN weblog.

If you can shoot video this good inside nightclubs, imagine what real estate consumers will do in the future, particularly if they are given a financial incentive to share their grassroots expertise as The Real Estate Cafe does with it's "tipping policy."