Monthly Archives: August 2013

Agent of Change

transformationI was talking with a client this week after a particularly unsatisfying trip out to look at new listings that just came on the market.  Here’s her situation.  I have a feeling it might sound a little familiar to some of you.

She sold her condo a few months ago and moved into a rental. She’s been looking ever since. Still searching for a move-up house that will become her home for a long time to come.

There are days she’s hopeful. Days she’s frustrated. Days she’s anxious.  Days she wonders if somehow she’s traded in the dream of homeownership for a permanent spot on the rent rolls. Days she wishes she could paint the wall in the kitchen. Days she wishes some of her stuff wasn’t in storage.

Days she can’t believe there isn’t more on the market to chose from. Days she’s convinced the universe is plotting against her – personally.  Days when the promise of a new listing magically floats up on her computer screen and she gets excited all over again.  And of course, some days with all of the above.

It wasn’t the original plan to relocate temporarily into a rental.  At least not Plan A – which would have been: Take advantage of the spring surge in market activity when multiple offers started flying. Get her condo into escrow with some really tight contingency timelines. With a really good, all-cash buyer. Or at least one with a solid, slam-dunk loan process in front of them.

From there she, would open herself up to the fates.  Or luck. Or divine intervention. Or the rule of karmic law.  Or the mysteries of synchronicity. Or the vagaries of quantum possibility.  Hoping she could find just the right house at just the right price – quickly.

Then, she’d make an offer. Beat out the competition. And get it accepted. We’d choreograph everything so that there could be a reasonably simultaneous closing on both places (or a short rent back period on the first).

No, Plan A is not a very easy task these days. I’m not sure it ever was. It was easi-er in the past though.

The Plan B we discussed long before we ever listed the condo was exactly this.  Sell it. Liberate the equity. Get rid of the hassle. Take the plunge. Suffer through the indignities of having to live in a home while it’s for sale.  In the middle of the fishbowl. In anything but normal fashion. On a staged stage you are supposed to leave every time someone wants to come over and look.

If there’s anyone who actually enjoys the process of selling the house they are living in, they should have their head examined.

There was also a Plan C of course. There always is.  Plan C is the one where you simply don’t do anything.  You make the default  choice to not move at all.  Much easier in the short run. You just breathe a long sigh of relief. And resign yourself to hunkering down in a place where you aren’t happy. May even be miserable in.

It’s funny how often people choose to accept what they know is not working in their lives. Instead of choosing to face something far more terrifying – the unknown of change. Specially when it has to do with home and all things familiar. The stuff.  The routines. All the established patterns we surround ourselves with and anchor our lives to – for good and bad, better and worse.

That’s the beauty of this business which isn’t really a business so much as a calling – if you view it in the right way.  It puts Agents in touch with some of people’s deepest fears. It includes us in their intimate stories.  It invites us to become Agents of Change.

And ultimately it provides us with proof positive over the years, that it’s possible to choose change. Confront our resistance to the unknown. Embrace it.  Actually come to view it as an adventure rather than an arduous and awful journey.  And to come out the other side. Happy. Healthy. Balanced. Safely ensconced.

She will find the right place. I don’t have any doubt.


Chums in the Shark Tank

shark-tank__120512010349I don’t know.  I can’t tell if it’s my imagination or not.  Sure feels like the sheer volume of marketing solicitations for web design, search engine optimization, cloud sharing, google ad words, social-media and lead-capture generation is increasing at a scary pace.

The number of pokes, prods, pings and pitches aimed in my direction on any given day is staggering.   It was one thing when companies trying to hand out keys to real estate success shipped their content to my email address and let it camp out in my spam filter.  Hoping some of it might eventually spill over into my in-box and force me to notice before I hit the delete key.

These days those offers arrive non-stop in a flood of calls to my personal data switchboard.  My phone vibrates in a steady state of arousal and constant contact. Listing leads proposition me when I’m in the middle of listing appointments.  Buyer leads offer themselves up when I’m in the middle of showing property to real buyers.  Big data reaches out to touch me whenever I’m trying to focus on the small details of a difficult purchase contract.

Aren’t we Realtors supposed to be the pushy ones?  The used-car salespeople with the Svengali-like powers that enable us to talk unsuspecting buyers into purchasing $700,000 fixer-uppers before they’ve made it halfway through an open house?

Somehow all those new web marketing companies keep coming up with better and better Svengali-like algorithms and I’m not really sure anymore if  I can get along without them.

They have a captive audience. A sitting duck.  I can’t run. I can’t hide. And I can’t escape the onslaught of their eager voices. Because I can’t possibly turn my phone off.  I’m the “I” in the I Phone.  I don’t exist without it. We co-create our realty.

And so…in a stunning reveral of roles, we Realtors have become the favorite new flavor of chum that’s getting fed into the rest of the world’s rabid shark tank.

Every time I see a 480, 503 or 619  area code pop up on my phone, I have a Pavlovian response. No, not salivation…more like rolling eyes, twitching lips and an automatic groan punctuated by a curse.

Google this why don’t you?  Quit bugging me!!

I’m not sure why so many people living in Portland, San Diego and Phoenix are employed as phone solicitors with Realtors as their chosen targets.  I guess those of us who can – do.   And those of us who can’t move to Portland and try to sell more marketing to those who can.

If there really were all those buyer leads that buyer lead companies say they have, we’d be able to resurrect 2005 all over again – on steroids.   There would never be another market slowdown again.  There would just be one long housing bubble exceeded by an even bigger housing information bubble.

Here’s the way I’m starting to think about this:  Remember when the mortgage industry took a wrong turn?  At first fewer and fewer loans were actually portfolio’d by the companies making them.  Afterwhile as soon as the ink of the notary stamp was dry on the deed,  the mortgage was already sold.

Eventually the entire world economy revolved around mortgage debt.  Real people purchased real homes.  From there it got surreal.  Loans were sold. And sold again. And yet again.  Packaged and tranched and bet against in the form of credit default swaps ad infinitum, ad nauseum. Some mortgages were sold so many times, when it came time to foreclose, no one could figure out where the paper was or who owned it.

Middle men selling to other middle men selling to other middle men –  making money at each point of sale.   But the system needed that real loan origination in the first place, as content to kick off the fun.

These days when I list a property and put it on the MLS, the MLS sells it to all kinds of other real estate information sites. Zillows, Trulia and et al package and provide the information to a larger public audience and sell advertising back to us Realtors for the privilege.

Creative people come up with all kinds of crazy ways to sell the sell of the sell to the rest of us.  Everyone can make money without having to actually make anything or do anything other than manipulate data.  Real estate once again leads the way to economic recovery from the recession.  Leave it up to the algorithms – let the monetized free-for-all begin.

Show Us The Money!

showmethemoneyphotoIf you want to pick up the full thread of recent ramblings,  you’ve got to go to  and read my three previous columns exploring different dynamics that are playing themselves out in very distinct price ranges of the Santa Cruz County real estate market.

Last week we looked at market stats for the highest priced homes in SC. Those listed above $2m and $3m (all the way to $15m!) We ended with the observation that the market for the highest of our high-end homes has been conspicuously missing in action for the first 7 months of 2013.

What should we make of the high-end slump we are in?  After 7 months, with more than 50 properties actively listed in the upper-echelons, shouldn’t some  properties be selling for $3m. Or $5m. Or higher?

They did last year. And the year before. And the year before that.  You gotta go back to the earliest days of the advent of the million-dollar home market in SC, to find a drought lasting this long.

It begs further questions.  We’re right next to Silicon Valley. The overwhelming consensus is that the general economy and the housing market are both much-improved. There’s big money out there.  So why isn’t that money buying one of those great beach homes on the sand or one of those beautiful view estates up in the hills overlooking the Bay? Writing the offer even as we speak? Where is that money riding and/or hiding?

I’m going to give you my own ten cent tour of the landscape.  A quick synopsis factors/trends/trajectories/shifts that I think are contributing to our lack of high-end activity.

I’m sure my thinking is flawed but I’m going to take some solace in advance,  knowing that back in 2006, Alan Greenspan,  arguably the most well-informed man on the planet when it came to economic information, data collection and statistical analysis,  apparently had no clue about what some of the rest of us in the lowly ranks of the uninitiated knew long before that big old bubble burst.

– Stock Market on a Roll:  When the stock market is up, the real estate market doesn’t necessarily follow. It often goes in the other direction.  High Net Worth Individuals (HNWIs) like to keep their money in the stock market.

– Interest  Rates Low:  When the rates are low, moderate income people purchase primary residences with long-term fixed-rate mortgages.  When interest rates are low HNWIs keep their money invested in equity markets and put off buying those discretionary homes by the beach till later.

-Facebook Fall Out:  When Facebook’s IPO didn’t happen as planned, those teeming hordes of Facebook millionaires weren’t unleashed on the real estate market.  Dozens of other high-profile IPOs geared to follow were held back.  Less crazy IPO money = less crazy real estate purchases.

– Concentration of Wealth:  Big money is getting concentrated into the hands of fewer people. Even among the wealthy.  Venture Capitalists in Silicon Valley have the biggest bucks – but that’s an increasingly exclusive club of HNWI.

– Old Tech vs New Tech:  The nature of the tech in Silicon Valley these days is fundamentally different. Old Tech was chips, software, lots of employees, highly-paid engineers, older executive-level salaries, infrastructure and huge buildings. Silicon Valley was growing towards us – migrating further south towards the beaches of Santa Cruz.

New Tech is younger, smaller, social media/web-based/mobile apps, algorithms, fewer employees, information in lieu of products. Silicon Valley is moving farther north from Palo Alto to the urban coffee houses of San Francisco.  Different home choices follow in the wake..

-Demographic Shifts.  Big changes are afoot. Tough to see when your are living in the middle of them.  But the signs are everywhere, all around us.

For the first time in more than 100 years Urban Areas are growing in population and Suburban Areas are shrinking.     Nuclear Families now represent a minority of American households.  Aging Baby Boomers and Young Urban Techies are drawn to places where they can walk and experience active lives and rich cultural offerings.  People are downsizing. Getting more green. Leaving smaller carbon footprints.  Driving less.  Owning less stuff.  Many of these factors combine to promote the cultural and aesthetic antithesis of large homes and conspicuous displays of wealth.

Ok folks,  there’s  some Food for Thought.  I’m open to other suggestions about why the high-end market is flat.  Share ‘em if you got ‘em