The most valuable real estate is that of the mind: bloggers are having an impact.

Note: Once again, if you are looking for data and graphs, this post is not for you.

So much could be said about this issue. One of the most fascinating developments to see unfold and the one theme I keep coming back to is how powerful blogging has been in shaping the mind-set of the public when it comes to the real estate market, both nationally and locally. Not only is it powerful in the psyche of the buying or selling consumer, but also to those who actively work in real estate.

For example, there has been an enormous effort within the real estate community to combat negative housing sentiment. It is understandable. But, I also think that the effort serves two purposes. First, it is to combat a deteriorating market perception for the public. Second, it is to thwart the potential fallout from within the rank and file who work in the industry.

What’s so different about our market correction today than last time?

  • Access to information.
  • Bloggers vs. NAR. (real estate industry unable to counter bloggers using both video and blogs)
  • Bloggers vs. Newspapers.
  • Bloggers breaking down data.
  • Bloggers sharing news or breaking news.

Rather than have circa 1990 technology to obtain information regarding all things real estate related, today we have what I consider information overload. I can’t keep up with it myself. It’s overwhelming.

Zillow.com, for my money, was instrumental in removing the price curtain from the real estate machine. This forced an entire industry to change or adapt. While people will argue about current value accuracy or Zestimates, the compelling number of immeasurable value is the disclosure of what a property recently sold for. Armed with this information, consumers can make decisions along with their real estate agent as to how to best position offers or whether or not purchasing is best for them at a given time.

In a classic case of blogging for mind share, I see countless references by real estate agents locally and around the country arguing to “put the market into perspective, only 1 percent of all outstanding mortgages are in default.” Quite swiftly, a contrarian blogger responds, that’s “good news, because if it were more than one percent, I can’t imagine how bad things would be. Bear Stearns would be only one of scores of financial players to collapse, and who knows, maybe we will have more to come?”

To conclude:

If contrarion bloggers on Seattle Bubble find that the market has shifted in a positive direction, it could very well be that those very contrarions will lead the charge to a swift and meaningful recovery, one of which could rival anything we’ve seen to date.

And then, The Tim will have a conundrum on his hands. What then to do with the “bubble” part of the title.

S-Crow

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About S-Crow

"S-Crow" (Tim Kane) is co-owner (with spouse Lynlee, LPO-Designated escrow Officer) of Legacy Escrow Service, Inc., an authentic independent escrow firm closing residential purchase/sale and refinance transactions.

23 comments:

  1. 1

    You are right, but it seems bloggers are powerful mainly only in US. I am dealing with West Toronto homes and Canadian real estate blogging is still at the beginning. But now, when information about our slowdown are spreading over the web it seems, our blogs are starting to live. I really wonder what influence will they have and how the situation will develope…

  2. 2

    Great point. I am working as a Toronto real estate agent. I am quite a long time in a business. I have really experienced this change. It has significantly impacted whole real estate business. I was very lucky that I had read one interesting survey about possibilities of internet few years ago. It totally changed my mind. It was a time when most of realtors were without their own webpage. We were one of the firsts who have started to offer on the internet. We were able to get a great advantage by this step and it was also the time of our strongest growth.

  3. 3
    amazedrenter says:

    Thanks for the post, s-crow.

    Wholeheartedly agreed with your comments, and one addition: In 1990, the NAR must have had a strong grip on the market with their market data (Although I’m too young to know for sure). Now, we have Shiller’s price index, and various other institutions improving the quality of the available data to the public. The NAR’s data is slowly but surely losing credibility as the “voice of real estate.”

  4. 4
    S-Crow says:

    One of the other local dynamics I watch with interest is the interaction between Zillow and it’s core constituents it reaches out to: real estate agents & brokers and now mortgage brokers.

    With Zillow’s Stan Humphries arguing that their Zindex model may rival that of Case-Shiller and reporting challenging market conditions, it’s interesting to see how they “manage” their reporting without alienating the very advertisers/industry they wish to obtain data from. It is quite a balancing act and they seem to be very good at it.

  5. 5
    S-Crow says:

    Late last evening, I got a chance to read through the most recent dialogue and comments on Ardell’s most recent post on RCG regarding 2008 predictions.

    It was interesting to see how certain comments from different people seem to have shifted from months earlier stances on market directions.

  6. 6
    SeattleMoose says:

    Agree that blogging has helped “call a spade a spade” when the NAR would like to spin otherwise. But even without blogging, fundamentals would eventually have to be served. Blogging could not turn a great housing market “bad” if it were not already destined to crash. But blogging does help expedite trends by laying out the truth and removing the “smoke and mirrors” put out by the NAR and the MSM.

    The NAR and the MSM are not impartial and hence news is filtered thru agendas. Blogs on the other hand provide a much more impartial take on what is actually going on. Consequently, one can get a much clearer picture of truth/reality on a blog than any “controlled” communication medium.

    And the collective IQ of the blogosphere is much higher than the MSM “news readers” and their handlers. And all of this makes blogs “dangerous” to the ingrained power structures in this country.

    One has to wonder whether blogs will eventually be “shut down” so the power structures in this country can resume monopoly over news and “truth”.

    Remember the old Yahoo Message Boards that were “shut down” in late 2004 when a WallStreet hack (Neil Budde) was brought in to “cleanup” Yahoo News? The excuse was a few vocal posters dominated/abused the boards but it is clear in retrospect the act was to “defuse” a growing political backlash against BushCo. Don’t think the same thing couldn’t happen to blogs…

  7. 7
    Affluent Bitter Renter says:

    The bloggers (and buyer psychology) have had an impact, because one of the key things driving prices so high was the prospect of future appreciation (“Real estate in Seattle goes up 20% a year!). With that belief, it made sense to mortgage oneself to the hilt for a space considerably inferior for what you could get renting.

    The problem is, once the belief in appreciation goes away, it suddenly seems stupid to mortgage oneself to the hilt for a space considerably inferior for what you could get renting, so the housing market freezes up until prices readjust to reflect the new expectations.

  8. 8
    mike mcc says:

    The sheer volume of information and opinions online is amazing.
    The problem becomes the time needed to sort thru it, and many simply
    are ignoring certain blogs as being simply argumentative.

    We see bloggers writing like mad, and giving their version of events,
    we see real estate agents, escrow professionals and mortgage
    people chiming in too – but what we don’t see are the economists. We see
    quotes by them from bloggers, but lack a direct conversation.

    I question too, when EMPLOYERS are going to realize that their
    employees are spending so much time during work hours blogging,
    not only about real estate, but about their dogs, their cars, their
    passions. If you look at the blog times for many posts, you have got
    to wonder, is any work actually getting done? :-)

    And, what a lot of bloggers don’t realize, is that no one pays attention to
    NAR, except them.

  9. 9
    FreedomLover says:

    SeattleMoose :

    Remember the old Yahoo Message Boards that were “shut down” in late 2004 when a WallStreet hack (Neil Budde) was brought in to “cleanup” Yahoo News? The excuse was a few vocal posters dominated/abused the boards but it is clear in retrospect the act was to “defuse” a growing political backlash against BushCo. Don’t think the same thing couldn’t happen to blogs…

    Oh can it – they shut it down because it was a pure cesspool of profanity. Nothing else. Your BDS is out of control.

  10. 10
    SeattleMoose says:

    “they shut it down because it was a pure cesspool of profanity. Nothing else.”

    You are just parroting the “party line”. Learn to question the reasons and motives of those who provide the official version of anything. Budde was a hit man and he promised to replace the message boards after saying they were down “temporarily”… They never were reinstated.

    I don’t want to see blogs like Tim’s shut down for some flimsy reason just because the NAR pulls some strings in Washington. Who among us should be entitled to put caveats on “free speech”? That is a very slippery slope…..

    “Free Speech” is only such if it is completely uncensored….warts and all.

  11. 11
    SeattleMoose says:

    And you call yourself “Freedom Lover”?….how ironic!!!

  12. 12
    John says:

    SeattleMoose, did you only read the Yahoo news boards that were attached to political news? Politics had nothing to do with the boards shutdown. The busiest boards often had nothing to do with politics. Famous deaths and disasters were very popular. I know because I was one of “those” posters. Their admins and probably even advertisers got tons of complaints because of the stuff that was posted every minute of the day. I could imagine they got sick of the mess and figured it wasn’t worth the hassle anymore. It was fun while it lasted.

  13. 13
    TJ_98370 says:

    Off topic – Vashon-Maury Island Beachcomber, Whidbey News Times, the Seattle Times and other northwest newspapers are quoted in Ben Jones’ HBB today:

    It’s All a Big Tangled Mess

  14. 14
    softwarengineer says:

    SOME NEWS IS ONLY ON THE BLOGS

    Speaking on the issues with moralistic pragmatic solutions, with real environmental growth mitigation and carbon footprint reduction, is omitted by most MSM. But make sure to recycle though…lol

    I would add too, diversity preaching and education, without simultaneous world and local overpopulation mitigation science incorporated in our Seattle schools and news sources, is “vile brainwashing” by corporate controlled news sources and our government. Its definitely not progressive or old fashion Democrat at all either.

    Its probably the root cause of the Seattle real state price decline with subprime mess and definitely Orwellian in nature. Will Hillary, Barrack or McCain pull us out of this mess without growth control? Absolutely not.

  15. 15
    Herman says:

    One problem with the expansion of blogs is that if you have a predisposed opinion, you can easily find others to validate it. If you think the market will tank, you find this site and you are in the company of others who will cement your opinion. If you think Seattle will not tank, then you can go to RCG and cement that opinion instead.

  16. 16
    david losh says:

    If you talk with Real Estate agents who have been successful for over five to ten years they will tell you the public has a lot of bad information. In my opinion the hysteria about buying Real Estate was promoted, then advanced by the internet. One comment was right:

    (1990s) It was a time when most of Realtors were without their own web page. We were one of the firsts who have started to offer on the internet. We were able to get a great advantage by this step and it was also the time of our strongest growth.

    As Real Estate agents and companies began plying disinformation about Real Estate products, the public got caught up. I think the strongest evidence is that it’s a global phenomenon.

  17. 17
    Ray Pepper says:

    We have found blogging to be an effective form of communication to pass on the way we believe Real Estate will be conducted in the next 5-10 years. It will all be about Lead Generation and Execution for all the New 500 Realty’s, Red Fin’s, and MLS 4 Owners.

    The 6% commissions are quiclky coming to an end. 5% is now rampant in the Major Brokerages and I’m here to tell you it will become far less then that. In the end the consumer will win for they will finally be given a choice.

    Educate yourself Washington!

    Ray Pepper
    http://www.500Realty.net

  18. 18
    bitterowner says:

    Re: “Late last evening, I got a chance to read through the most recent dialogue and comments on Ardell’s most recent post on RCG regarding 2008 predictions.

    It was interesting to see how certain comments from different people seem to have shifted from months earlier stances on market directions.”

    S-Crow, that is indeed interesting. It’s much easier to predict rain when the storm clouds have gathered overhead. In spite of this, I doubt Ardell will ever admit she was wrong. I’m sure it’ll be more along the lines of “I was right while I was right and when it started looking like I’d be wrong I changed my tune and was right again so I was never really wrong.” In the end, it really doesn’t matter much, though, except maybe to the last clients who were advised to buy right before her outlook changed.

  19. 19
    TJ_98370 says:

    The power of blogging is that info / opinions / ideas can be widely disseminated by the common person without modification by those who control conventional media. The downside is that there is alot of noise. It’s up to the “audience” to filter out the B.S. So be it. I have faith in those who really want to know the truth to be able to differantiate the crap from the worthwhile.

  20. 20

    Spencer from Zillow here. Interesting post, and comments.
    A reporter asked me the other day whether he thinks we’ll come out of this housing correction because there are more internet tools at people’s disposal than during previous corrections. Personally, I don’t think that it will help make the correction shorter. However, there’s no doubt that it’s helping homeowners, buyers, sellers, and agents to be SMARTER during the downturn.
    The other interesting question is whether we’d be in this mess in the first place if the Internet had been as highly evolved 3 years ago as it is today. No, I don’t think so. I think the proliferation of Internet real estate tools (including blogs, and Zillow), would have tempered the run-up and would have helped minimize the carnage which we’re all witnessing.
    Just one person’s opinion.

  21. 21
    NostraDamnUs says:

    Tim – here’s a clue for you – register SeattleRealEstateBullMarket.com while it’s still up for grabs. Then, a year from now, you’ll get to be right again… Kinda like a broken analog clock – gets to be rights twice a day.

  22. 22
    S-Crow says:

    Spencer,

    Yes, good point. There may have been no Zillow, Redfin, or CBBain or JLS 2.5 years ago with sold data at consumers fingertips, but there were plenty of contrarion viewpoints on blogs talking about a major real estate bubble.

    I’m really uncertain that anything could have stopped the mania, even with data at the public’s fingertips. Going forward, it will be interesting to see if data collectors such as Zillow or others would temper any future run-ups. Human nature is kind of tough to harness when essentially free money is available to the masses.

  23. 23
    NostraDamnUs says:

    > Human nature is kind of tough to harness when essentially free
    > money is available to the masses.

    L Ron Hubbard counted on human nature to build out his Scientology following. What makes you think it’s different when trying to amass a fortune in other ways?

    When you react rather than choose consciously after consideration, what you see right now is what you will always get.

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