Value of Real Estate blogs?

[davidlosh@davidlosh.com]

When you go to a blog or website for information concerning Real Estate are you getting information or is some one steering you.

I know Real Estate agents who used to camp out on craigslist to get people to buy a listing, or get a set of buyers to an open house. There are those who target certain crowds by linking website stuff to other web site stuff.

Do you trust redfin and Zillow more than other Real Estate agents and mortgage brokers? Why? Is it the time you spend with them on line? Are you being steered to use a service that is telling you what you want to hear?

I can answer these questions myself, but it's just my opinion. Really, if you are making a financial commitment for a quarter to a half of a million dollars in debt, why do you trust internet information more?

[ira s]

Good point, David.
I think that people in the real estate industry have slit their own throats by proving themselves untrustworthy, and by promoting their own best interests over the best interests of their clients. Of course there are exceptions ( like you and me, for example).
That doesn't mean that the Redfins, Zillows, and real estate blogs are any more unbiased or more trustworthy than J Lennox Scott.
They're just newer and are seen as the only alternative to something that people don't trust.
And of course Seattle Bubble ( it's a real estate blog) is different...
Sure, a good percentage of comments are made by people who are positive that they couldn't possibly be wrong, or have something to gain.
But when data is presented, there's no real agenda there. It's just data.
And some of the discussions here have broadened my perspective. I learn more here than on any other real estate blog.

[rose-colored-coolaid]

I trust the internet more...sort of.

1) No pressure - if a blogger says something I disagree with, I google for corraborating information. If I don't find any, I shrug and move on. Sitting in front of a realtor, I cannot as easily ignore them when I want.

2) Credibility - the best way to determine who to trust is to look at their history and see who was trustworthy in the past. If I just get some realtor, I cannot easily verify their trustworthiness. On the internet, I can (typically) look at the past to see how accurate or reliable a source was. When did Tim start predicting a bubble? Has he been accurate in the past?

3) Numbers - let's face it, most realtors are not that interested in selling the numbers or other pieces of factual information out there. Even good honest realtors or brokers are more concerned with your emotional state during and following a transaction than providing you with a fully detailed report.

4) Computer algorithms - they don't falsify information. When redfin's algorithm finds "similar homes" I know it is doing the same thing for me as it is for the brother of a broker working at redfin. The algorithm itself could have a flaw, but everyone gets the same flaw. And eventually it will be fixed. Real people just aren't reliable in the same kind of way.

[ira s]

"When did Tim start predicting a bubble? Has he been accurate in the past?"


I think that's a difference between Kary Krismer and myself.
Kary doesn't like to make predictions. He doesn't see much value in it. And a year or two from now nobody's going to come back and point out his wrongness because he didn't make any predictions.
I, on the other hand, make predictions whenever I'm asked. ,mostly because I think it's fun. I've been wrong in almost all of my predictions, but at least wrong in both directions. I was way too conservative in my prediction of the rate of home price decline, but most recently my June closings prediction was way too low, and June finished with several hundred more closings than I predicted. I'll be an easy target for someone to point out as an off the mark predictor.

[rose-colored-coolaid]

[davidlosh@davidlosh.com]

Let's address this site which is supposed to be less biased than the Real Estate sites. Agents come here, make comments, then get shouted down, and they go away.

Some of these people have information you can use, but you wouldn't get it.

At the same time some of the most ridiculous statements made by regular commenters are left to sage advice.

One of the comments today was that a person made three low offers and the properties sold for less than the offers he made. As a statement of fact he proclaims he knows the market stats better than any agent here, like that means something to negotiating a Real Estate Agreement.

If this site actually contributed to your Real Estate experience then how should it be compensated? If it were truly a forum should all be welcomed?

[rose-colored-coolaid]

I don't really understand your questions(?) David. From what I've seen on this blog, the majority of posters respect professionals who bring well reasoned opinions. It's when a professional's entire argument begins and ends with their own hubris that they get shouted down.

That's not to say that there aren't other posters on the other extreme who post crazy unsubstantiated things, but they usually at least seem a little humbled by the fact that they know nobody else agrees with their opinion (say 80% overall declines). At least for me, that pride issue is the primary difference between someone I can cordially disagree with and someone I'd rather lambast.

[Wanderer]

Data is data and opinions are... well, worth what you pay for them. I read SB religiously, but I only rarely skim over the forum topics and even more rarely read through the comments (posts or forums). By this point, I can make my own opinions based on the data that The Tim is kind enough to provide and other consistent posters occasionally share. Just like real estate professionals who have a vested interest in convincing people that today is a great day to buy/sell, many of the comments are geared toward the vested interest of making people feel good about their personal decisions not to buy. I don't trust anyone in either of those camps, since my goal is to make the best decision about when to buy. The answer lies somewhere between "Always" and "Never," and I just want some clear data so I can make my own decision.

Which brings me back to the original question. Do I trust Redfin more? Absolutely, because as R-C-C says, it is displayed consistently and without bias. Someone has decided that it makes financial sense to offer the search service for free because, on average, it will bring in enough customers to more than cover their costs. Since that decision has already been made, there is no incentive or effort (I believe) to misrepresent the data. They recognize that inaccurate, cloudy, or hard to obtain data will only reduce their conversion rate to get paying customers.

I could ask a Realtor to search on my behalf for exactly the same criteria that I plug into Redfin. Besides the fact that it would be a waste of their time (I will wait to see what happens this winter at least), I absolutely would not trust their results. Their livelihood is tied to convincing me that it is a good idea to buy a house... any house. Is there a single person in that profession that will say, "There are some nice houses out there, prices have come down some, but I think that all prices are going to go down another x%. You should wait." ??? I venture to say, absolutely not. There will ALWAYS be a reason to buy... interest rates going up, tax credit, prices rebounding, etc. etc. If you know the answer in advance, what is the point of asking the question in the first place? I can't even say that I blame them... it's just human nature. I am sure that they all go to sleep thinking that they are helping people achieve their dreams of home ownership, but that doesn't make it so. Bubbleheads in 2008 were on the receiving end of the "even a broken clock is right twice a day" barb because they had been calling for a burst since 2006. Realtors will get the same treatment at some point because prices will eventually turn up after they have consistently called a bottom for a couple years.
Redfin just provides data, and I don't trust a Realtor to provide the following information except as they think it will advance their cause of making a sale:
1) How long has it been on the market (including delist/relist)?
2) Have there been any asking price reductions?
3) How does the $/sft relate to the area and current trends?
4) What did it sell for last and does it look like the seller is trying to get 200% of their investment for granite counter tops that they installed in 2007?
5) Does it look like I could get the same or comparable property for less money in 6 months? OK, that is subjective, but I think I have a pretty good feel at this point and NO Realtor is going to say that.

/babbling

[davidlosh@davidlosh.com]

The Real Estate market never changes. I don't know how many times I can say that. In 2005, 2006, 2007, 2008, It was a time to sell. 2009 not so much because it is a lateral trade.

Real Estate is worth what it will rent for, maybe a little more, maybe a little less. This morning you have opened another door about Real Estate agents.

Data may be data, but a Real Estate agent makes money on commission. Whether the client buys or sells the commission is still there to be earned. If you buy well or sell well it's all the same. That's the part people who have Real Estate licenses don't get. That's the part the public never gets.

There are buyer and seller markets. Those terms are there for a reason, always have been, and always will be. There are times to buy and there are times to sell.

A Real Estate professional is some thing different. They know the difference between buying and selling. What the property sells for today or ten years ago makes no difference. The property has value.

Seeing the data doesn't mean you are going to get what you want. Like I said a property is worth what it will rent for. That's the core value. The second part about that is a property is worth the amount of equity you can extract. That's where we are today.

All of the data is going out the window. Banks lent more than properties are worth. The banks know the formula of rental income, ignored that, and lent more, to create Notes. So now your data is screwed.

That's the whole point, the public thinks they know something by looking at data. When the data goes wacky then it's meaningless. This year people are buying property at ridiculous prices based on false data. In two years, as the market settles, those same redfin data sales will be as bad as people who bought at peak prices.

[ira s]

Wanderer,
I can think of at least one real estate professional who routine suggests that waiting to buy is a good thing. Me. If you've read my posts, you'll have seen that I'm anticipating further price declines . I don't see it as being in my vested interest to suggest buying now. It's more in my vested interest to establish myself as someone who doesn't go along with my RE professional brethren, and values and shares data.
Unfortunately, Redfin is not allowed to provide all the data, such as complete price changes and info on previous listings for the same property.

[Wanderer]

David and Ira,
Thanks for humoring my ramblings with a reply.

It is true that data itself does not guarantee an optimum decision. I just have faith in my own ability at this point to use the data that is available to make the best personal decision about overall market trends and even individual houses in individual markets. The confidence to interpret that data correctly (in my view) has been made possible by Seattlebubble and Calculated Risk for the most part and definitely not Realtors. It may be unfair to lump everyone in the profession together, but when you buy into a trademarked name, it is hard to escape that.

I am the kind of guy who makes a spreadsheet to relate rental versus property values. I know the thumbrules and I know about the calculators (the NY Times one is great), but there is something about getting into the spreadsheet and discounting my own cash flows. Maybe the 30 year old Realtor selling to my buddy is doing those calculations behind the scenes, but it sure sounds like he is just asking how much he can afford and stressing that prices are going to rebound soon. Prices are low now, so it is a good time to buy. Ira must be pretty lonely out there saying that prices are low... and they will probably go lower.

Now, I might very well use a Realtor because there is an administrative and procedural aspect to home buying that I don't know... yet. If I were to ask for guidance about how to learn those tasks, I imagine that I would get advice with different levels of utility from Seattlebubble and RCG.

[davidlosh@davidlosh.com]

From the beginning here on the Seattle Bubble I have always said it is a good time to buy. It's what you buy and how much you spend.

There are things the data doesn't tell you.

Here's the frustration for a lot of Real Estate Professionals; people remember what they hear and believe what they read. I tell people to sell and they tell me prices are still going up or staying the same. it's what they are reading. I tell people to buy and they tell me things are too expensive, or that I'm just trying to make a sale.

Unlike many Real Estate Sales people I have always had multiple streams of income. I have service businesses that are tied to the Real Estate Industry.

So I tell people to buy, hold, and pay it off. That has been what the most successful people in the Real Estate business do.

No matter what the market, there is a deal out there to be made. Buying, selling, and trading Real Estate has been going on for a thousand years. You need to know what to buy and how to get out of trouble if that comes up.

I don't see blogs giving any information about how to buy right. That's where the money is made. Most people want to buy towering trees and babbling brooks. They want a white picket fence close to a school they think will be good for the kids. No one talks about the sacrifices of trading up other than as a sales gimmick.

There's a system with rules that if you follow you do well, if you fight it you lose money. We had ten years where even an idiot could sell when they got in trouble, now people will need to get smarter.

[davidlosh@davidlosh.com]

Boy did that go sideways.

Rain City guide changed it's format and then brought on a real estate brokerage to provide home searches. It was done in an odd way. It appears they didn't inform the contributors, I mean the people who posted articles. Ardell jumped right in with some controversy, but the site has kind of just sat there.

i like the format, but it is a reminder that some one else owns the site and they can do what they want.

Over on another web 2.0 transparency site they have gone off on some political tangent I guess to create controversy and get eyes that way.

On the real estate site they heavily monitor the comments to get the right flavor. I have made the claim that my comments have been deleted for RCG and especially the redfin blog. That blog has to be written and commented on by in house staff. It's the only way, in my opinion, that they keep the happy redfin fan flavor of the blog.

There needs to be back end profit to justify the time, but what would that profit be to some one like Tim who is outside of the community commenting on something he is observing?

[WestSideBilly]

Are you sure Redfin isn't deleting your posts because you berate them every chance you get?

[davidlosh@davidlosh.com]

Most blogs that I look at concerning real estate are sales sites. The redifin site is no different.
This site has never deleted comments except when it was discussed. In transparency, if there ever was any intention to have transparency, that's the way it should be.