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Sky-High Real Estate


hausdok
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Hi All,

An article in this morning's Seattle Post-Intelligencer painted a pretty bleak picture for home buyers in the Seattle, King County area.

The gist of the article was about how Seattle is too expensive now, even for folks with relatively well-paying jobs. To buy a home in the city, you either have to be very low income and have housing assistance or you'd better be well-heeled.

According to the article, the median 2006 home price in Seattle was $450,000, but a single person making the U.S. median salary of $52,000 can only afford a $200,000 home and a family of four with a median income of $74,300 a year can only afford a $280,000 home. It went on to state that 51% of the people working in the city of Seattle don't live in Seattle and that the high cost of real estate is pushing folks farther and farther out of the city to find affordable housing. Pretty pathetic.

I don't know what they're talking about when they say that folks are finding affordable housing outside of the city, 'cuz I'm not seeing much of that. This is a house I inspected yesterday in Bothell, just over the King/Snohomish county line and about 16 miles from downtown Seattle. Price was $511,500 with a just over a 1/4-acre lot.

20074295013_skyhigh.jpg

That article will probably put a damper on home sales, and thus inspections, around here for a while. If there's an article in the P-I about falling interest rates, 3 weeks later I'll see a surge. If there's an article talking about the excessively high price of homes, like this, one, 3 weeks later things get really quiet until the next positive article. Don't know why it always takes 3 weeks, but that seems to be the pattern between real estate prognostication and how it plays out on the street around here.

How's it looking in other parts of the country?

ONE TEAM - ONE FIGHT!!!

Mike

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Been keeping stats for lots of years and the three week cycle has been around for a long time.

Here in Mich it seems the median price is $145,000 but the average price is $185,00 - so the 10-15yrs old house is in trouble and the new $275,000 house will sell. Our problem is when the resident of a 10-15yrs old house wants to move up the scale, they can't sell the house they own now. We still have many very good houses at the $125-170,000 level that seem to be moving.

This is the strangest market I have ever experienced.

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I blame 100% financing for our general woes. There has of course been talk of the collapse of the sub prime market but its more than that. The lenders are having problems at every level.

If the lenders don't dream up something else as stupid then I believe we will be back to normal in a couple of years. Whatever that means.

Another change I am concerned about and what the zoids are buzzing about is this on going and increasing shift of home buying and selling to the internet.

My reaction to it is that the zoid referral business is shifting maybe just going away eventually. I know that sounds hard to believe but thats what I think I see on the horizon. This death grip that they have on our business well by that logic have to loosen as more and more clients get thier referrals from internet searches and word of mouth other then the zoids since the people are bypassing them thinking that they are saving money by going FSBO.

Last year I did a record number of FSBO's

Wave of the future baby.

My marketing strategy is changing. Actually I didn't have one before. I have just been living off of word of mouth for about the last 5 years. My new strategy is going to be handing out a lot more businees cards with my web address.

Chris, Oregon

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The event that will cause the dam to break is the current lawsuit weaving it's way through Federal Court here in Chicago. (That's if the Justice Dept. wins....)

The only reason internet listings haven't completely exploded and taken over is the restrictive commission structure that the big folks (actually, folk, aka Cendant), have maintained to keep the 6%'er's in place. The 6%'er's don't share, i.e., they don't do business w/the internet'ers. The JD is saying a listing is a listing; no more holding back the information to maintain market monopoly. If the Justice Dept. prevails, the walls come tumbling down, and it'll be cutrate commissions, period.

One has to understand the business of the NAR. It's the largest trade association in the world, and it needs to keep a deathgrip on this stuff, or it will, itself, become critically weakened, and no longer be able to maintain the locomotive lobbying machinery that's kept the current paradigm in place all these decades. Used to be the real estate industry needed all those folks out in the neighborhoods to feed information back to the central office; not anymore, as the internet is now the information machinery.

If ever there was a business that lent itself to the internet, it's real estate. Honestly, I don't know why anyone would bother w/a realtor. I know folks that have sold their million dollar cribs on Craig's List; why would you want to dink around w/a professional door unlocker that skims off the top?

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Kurt,

Last condo I sold the Realtor (Beth Morgan, FWIW) worked *very* hard to get this difficult vacant unit sold, starting with furnishing it.

If you have an ideal unit in a hot market sure, Craig's List works - a message dropped in a bottle in Lake Erie would probably work.

In a over-saturated market segment and geographic area does a good realtor help? I think so.

Sometimes substaintially.

Should real competition prevail?

Absolutely!

Will the Realtors disappear... I doubt it.

But they are sure ain't gonna' be happy working for what we do...

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Originally posted by mthomas1

Kurt,

Last condo I sold the Realtor (Beth Morgan, FWIW) worked *very* hard to get this difficult vacant unit sold, starting with furnishing it.

If you have an ideal unit in a hot market sure, Craig's List works - a message dropped in a bottle in Lake Erie would probably work.

In a over-saturated market segment and geographic area does a good realtor help? I think so.

Sometimes substaintially.

Should real competition prevail?

Absolutely!

Will the Realtors disappear... I doubt it.

But they are sure ain't gonna' be happy working for what we do...

I know Beth; she's a friend of mine.

Think about this. Beth furnishes the unit and makes the commission, or you furnish the unit & keep the commission.

The realtor puts a cheesey ad in the Sunday paper & gets the commission, or you put a good ad & get to keep the commission.

The realtor waltzes folks around the place, tells them the kitchen is wonderful & gets the commission, or you walk folks around the place & treat them w/respect & negotiate intelligently & get to keep the commission.

If the MLS was opened up & put in the internet, the realtors immediately become what they are, which is glorified & overpaid professional door unlockers.

Now, if one doesn't want to keep the tens of thousands of dollars of commission, and give it to the broker because they're busy, I respect that. I honestly believe there's a need for brokerage, because most folks aren't intelligent or mature enough to negotiate their own business. If one is smart & mature, you sure as hell don't need a realtor.

Realtors love folks that think like you described. Realtors hate folks that think like business people, because they then become completely unnecessary. The idea is open up the listings to the internet; if the NAR can keep the lid on, OK, they win. If they lose, then consumers, and by association, we, win. Even in a dogmeat market, if the internet were opened up, one doesn't need realtors.

There's a parallel universe out there that the realtors insist doesn't exist. "Pay no attention to that internet behind the curtain."

Remember when Merrill Lynch & all the large security brokerage houses were laughing @ Charles Schwab, the discount broker? Or, the laughs & dismissive attitude they took when ETrade and the other online brokerage firms started up? this isn't an actual problem, it's a problem of perception. "Oh, I can't sell my house without a realtor." Guess what; yes you can.

Again, if you don't want to put in the time & energy to do the deal, that's fine; hire a realtor. If you want to keep all the money (and that's who I am), do the deal.

At MINIMUM, simply go get your realtors license, and list it yourself. The test is cheap & easy; a lot easier than the NHIE. I'm amazed everyone doesn't have their license.

I'm surprised I have to explain this.

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Kurt you are obviously a person who knows much about the business and well educated.This is the problem most of us have in that we forget things we take for granted as a given are not common knowledge to most people.Look at it this way Kurt.How many times have you walked into a place,unscrewed the aerator off a faucet to get rid of the rust and had the resident declare you a genius.Face it most people can"t use a screw driver.Now comes a home owner blue collar with no skills in communication other than apologizing to his boss for being late to work.

Maybe he struggled the last 20 or thirty years to make those mortgage payments.Now tell me how he going to have even an inkling of where to go or what to do on his own.

Just like lawyers agents are provided fees based on knowledge.

So here is an idea, what if you start a business helping these people sell on there own and what will you charge?

Heck I personally would pay you for your knowledge in getting inspections.

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Depends on what's on your plate at the moment. At that moment, for me, MIL dying in home Hospice, old business suddenly flaring up with lucrative consulting work, gut-out of a building I own - I was barely able to get over to the condo to patch and paint. Different situation, would FSBO. Sometimes - thinking like a business person - I'd rather just pay the commission than buy and move furniture, show the unit, etc.

YMMV.

Heck, MMVV, depending...

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Originally posted by mthomas1

Depends on what's on your plate at the moment. At that moment, for me, MIL dying in home Hospice, old business suddenly flaring up with lucrative consulting work, gut-out of a building I own - I was barely able to get over to the condo to patch and paint. Different situation, would FSBO. Sometimes - thinking like a business person - I'd rather just pay the commission than buy and move furniture, show the unit, etc.

YMMV.

Heck, MMVV, depending...

I respect that. With these sorts of involvements, paying Beth makes sense.

I was speaking in generalities. The only investment(s) I have are dirt w/buildings on them. There's no way in blue blazes I'm sharing a dime of my sweat equity w/someone.

I respect realtors with some skin in the game, i.e., they buy, fix up, sell, invest, develop, etc. The one's I just can't deal with are the legions of cloying smarmy leaches that do nothing other than hang around & suck up listings.

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Originally posted by chicago

Look at it this way Kurt.How many times have you walked into a place,unscrewed the aerator off a faucet to get rid of the rust and had the resident declare you a genius.Face it most people can"t use a screw driver.Now comes a home owner blue collar with no skills in communication other than apologizing to his boss for being late to work. Maybe he struggled the last 20 or thirty years to make those mortgage payments.Now tell me how he going to have even an inkling of where to go or what to do on his own.

Fair enough. Those folks need realtors.

So here is an idea, what if you start a business helping these people sell on there own and what will you charge?

Already a bunch of 'em way out in front of me. BuyOwner, 4SaleByU, FSBOChicago, Realtor.com, etc.

Heck I personally would pay you for your knowledge in getting inspections.

Heck, I'll tell you the main thing for free.

Hang around for 20 years doing good jobs. It's a big City; word gets around.

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Originally posted by chicago

Hey does this site have a new look?

I'm not sure yet. I think there're some gnomes in the software dinking around with it, so I'm not going to say anything until I know weather or not they're finished.

Anyone got any GnomeOff?[:-bonc01]

OT - OF!!!

M.

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