Finding Balance in Tumultuous Times

For most of us the end of March seems like an eternity ago and yet by the end of March, the first of March seemed like an eternity before that. 2020 has presented all of us with challenges we couldn’t have imagined and most of us would like to forget. Sadly life doesn’t allow us to disengage to the level many of us think we’d like and prefer to. The change in the calendar won’t likely change these feelings either. 2020 has created a need for all of us to find balance. Sure work-life balance would be nice–it’s been the topic of books, blogs, broadcasts and classes ad nauseum but it seems what most of need more of right now is just life balance.

Newscasts and headlines yank us over here, then send us over there. Political campaigns push us from hysteria to the depths of depression. Economic challenges, kids, schools, protests, riots….the lists go on and our frustrations and anxieties grow higher. Where can we find balance? Where is the finish line? When do we get to go back to normal? If you think the elections will change all of this, I think you’re going to be disappointed. 2020 has created the need and the challenge for all of us commit to finding our own balance, our own silence, refuge and mental sanctuary. Our own new normal.

While many are trying to find this by buying a bigger or different home (good news for me), most of us will find our challenges will still be with us in our new homes too. What we likely need more of is the strength and energy to tune out the noise, at least for a little while; take time to focus on what we want–what we focus on expands, so focus on you and your real wants–and commit to finding those moments of silence,( or screams), in our sanctuaries, so we can turn back around or get back up and face the challenges of our real lives.

Moaning, complaining, protesting for the sake of protesting isn’t going to reduce our problems or help us solve our daily challenges. Stepping back, taking some real breaths and focusing on what you can do today to eliminate or begin a path to reduce or eliminate even one challenge is worth the effort. Having been an independent contractor for most of my working life, I face challenges and frustrations every day; they’re real, scary and can be overwhelming. I haven’t and won’t conquer all of them–none of us will; but I’ve learned to take steps forward, seek progress and do something today to help reduce my anxieties. Even seemingly little steps will help you feel better about yourself, your abilities and your strength. Take those steps.

I offer this moment of reprieve and respite from the chaos in hopes that all of us can find some calm, some balance and some strength to help us face our individual challenges. The community, national or world problems will still be there. You’re not running away from them or being selfish to think of and take care of yourself first, your family next and then spread your strengths and talents outward. You need balance, grounding and focus to have strength and with all of the challenges we face, Lord knows we all need strength to prevail in these crazy days. Good luck to you in finding your balance points and keeping your focus on you first. At least we have Halloween to help us feel good about wearing a mask.

Photo by G T on Unsplash


Posted on October 22, 2020 at 11:22 pm
Paul Isenburg | Posted in In The News | Tagged , , ,

Market Update Amid Uncertain Times

Pardon my absence, the market has been running extremely hot for the past several months and I thought I’d offer some insights on the activity levels and sentiments. Contrary to many predictions early in the year, the market took a 4-6 week breath in mid-March but has taken off in a full stroke sprint since then. Almost all price ranges, property types and locations have had amazingly strong activity. Prices have been on a steady climb, up 4-8% since March, more in some pockets of the market and multiple offers have been more common than not. We’ve seen 40+% of the homes selling above asking prices; most in 6 days or less time and prices averaging 4% over asking prices in the broader market.

Interesting side note, initial pricing is still keenly critical. If a home should be priced at $675K, it needs to be priced there. Even if it may get bid up to $720 or more, pricing at $685-690 likely means the seller ultimately sells for less, in longer time and with more concessions. This does vary a bit by specific location but overall, the market is still amazingly price sensitive, even in our so-called Seller’s market with rising prices. This price sensitivity is even more critical in condominiums which are lagging the market pace but still strong overall. Downtown Seattle condos have some unique headwinds for sure.

A second point worth noting is that our weekly sales volumes have been 12-50% higher per week than 2019 levels since the end of May. Combine this with the fact that our inventory of available homes for sale is down 40-55%, it shows we have a true, organic and sustainable demand for homes to buy. We have lots of people looking for a home to buy and not enough supply to fill the demand.

So where is all this demand coming from? Mostly from local buyers, secure in their jobs and incomes and motivated by record low interest rates. The decline in interest rates is counter-balancing the rise in prices so people can pay a higher price and still lower their monthly payments. Affordability is rising.

Many first-time buyers are trying to jump into the market. Other current homeowners are making lifestyle adjustments to their home desires and moving up, down, in or out of cities and suburbs. The reasons are varied but the result is the same; they’re looking for a change, now.

Record low interest rates are projected to be with us into 2023 or beyond but if 2020 has taught us anything, it is that tomorrow’s paths aren’t certain. Buyers of all ages and demographics and for a variety of reasons are seeking to secure a home for tomorrow, today, by buying a home now.

I expect this desire for certainty and to capture a lower cost of housing will continue for the balance of this year and into 2021. We have a lot of life uncertainties going on, so being secure in your home is a foundational piece of personal security and comfort that likely continues to drive our local market. Business expansion and movement around the Sound is and will continue to bring more people and more demand into our region. With all of the headlines of uncertainty, this demand seems to be one good fortune we can continue to count on.

 

Photo courtesy of Paule Knete-Unsplash


Posted on September 23, 2020 at 9:01 pm
Paul Isenburg | Posted in In The News | Tagged , , , ,

Forbearance Impact on Lending and Home Values

As part of the Corona Virus response from the Federal Government, the Feds have provided an option for homeowners to not make their mortgage payments, with no need to prove a hardship or inability to pay.This is called Forbearance.

There are many moving parts to the mortgage industry, most of which homeowners aren’t aware. I can’t cover all of the behind the scenes details in one post or video, but I wanted to send out this video and basic outline of the potential harm this option can cause.

The bottom line is, if you can make your mortgage payments, please do so. If too many of us don’t, our future lending world and options to borrow for a home loan will get diminished and our home values will decline. Buyers won’t have the ability to meet new lender requirements. Fewer buyers, in any segment of the housing market, impacts all of the housing market–in a negative way.

Let’s limit the impact of the Corona Virus to our health and general economy, not spread it into our housing market. I have lenders able to help you or someone you care about to get financing but we don’t want to lose our options by people unnecessarily avoiding their mortgage payments. I hope you enjoy the video; Live from the Tiki Lounge.

 


Posted on April 15, 2020 at 10:16 pm
Paul Isenburg | Posted in In The News | Tagged , , , ,

Which Way Is Up For Real Estate?

This trek of isolating in our homes marches on. Hopefully some of our sunny days have helped to break the monotony and stress of isolation and lifted your spirits as we stay home to stay safe.

The real estate market was put on the essential business/services list just a few days after we were told we weren’t an essential business. That said, social distancing and personal safety, along with restrictions on movers, photographers, contractors, inspectors and home stagers all slowed the market activity level dramatically. We’ve since seen a release of these various jobs to open back up, but we’ve still seen a market slow down. Despite the recent publication of March sales and pricing data, all showing a continued strong market, we did see a pullback in new pending sales, homes sold but not yet closed. I expect we’ll see lower figures for closings and pending sales as we get into May and see the April figures.

Real estate has never seen such a giant swing in momentum in such a short period of time as we’ve experienced in the last 4 months. We had a sluggish early fall, with increasing market times and slower than normal sales but a steep decline in homes for sale that went on into March. December saw a big jump in sales activity and a corresponding jump in home prices. The lack of inventory and high demand made for quite a frenzy of multiple offers and new price highs. January and February continued very strong, even into early March which showed 55-58% of homes selling above their asking prices and average market times of 15 days or less for much of our region.

Then Covid 19 came to roost in our area and across the country and the World. We saw stock markets plunge and housing freeze. Quite a change in a 3-4 month period. The stock market plunge created panic in the Federal Reserve Bank, and they started buying Mortgage Backed Securities which created more troubles in the mortgage market and nearly collapsed the Secondary Mortgage market. This pushed interest rates up from the 3.375% range to over 5% and many lenders pulled out of the market altogether.

Calm is restoring in the mortgage market due to The Fed changing their behavior and time passing to allow lenders to get their books and balance sheets back in synch. We’re also seeing some rebound in the stock market as we see improving optimism related to the Covid 19 virus. So, what about the real estate market? With so many job losses and business closures, where will home prices go in the coming months? I wish I knew.

Economists and predictions vary widely, mostly due to any lack of true certainty over the Virus influence and impact. Most of us are hoping to be released from our homes by early May and then see some jobs and earning power restored. Unemployment is understandably high, but hopes are that we can see this decline over the next few months when the economy is open. Unemployment won’t drop back to its 3-4% range, but hopefully back below 10% yet this year. Hope is all any of us have right now.

The recent sales data do show a broad range of home values selling and generally across the whole Puget Sound region, so I’m optimistic that we’ll see a generally strong rebound in home sales. Not likely the frenzy of this late winter and early spring, but still a lively market. We’ve had 1,999 closed sales in the last 20 days in King and Snohomish Counties. We’ve also had 1,347 Pending sales and 364 Pending inspection sales in the last 20 days. That’s a bit over 1700 sales in 20 days of limited mobility; fairly active against a backdrop of 4,164 homes for sale in these 2 counties.

Real Estate, shelter, is an essential human need, along with food and safety/security. It offers us both shelter and hopefully some improved sense of safety and security. This means there is always “a” market. Every market has some holes within it; specific property types, locations or price points that are not as active as others. That will be the case in this recovery too. What I’m focusing on is the strength of many of our larger employers, their employee counts, spending patterns and the overall physical health of our region. This will help us have a more balanced market and housing opportunities for all.

Our social distancing seems to be paying off, even if taking longer that we wanted. I hope we can see a steady improvement in our physical recovery, no delayed or unexpected spikes in incidence or severity rates, so that businesses can re-open, re-hire and start finding our balance again. We will need more of us to participate in the physical and economic recovery to keep housing stable and a driving force in our economy.

No one knows with any certainty when or what the ultimate recovery pattern will be but I think most of us will be happy if we can see home values maintain close to their peak values attained this winter and our continued recovery in the stock market and our business climate. I have no fear of the market stalling out; we just have too much demand. We may well see a very lively initial bounce as families try to find their new homes this summer, so they’re settled in for the coming school year. My hope is that we have seen more of a deferral in market activity than a loss in market interest, ability or demand.

Some potential home sellers won’t be coming on the market due to their personal economic circumstances but anyone wanting or needing to sell should still find an ample supply of buyers looking for their new home in your neighborhood, hopefully inside your front door. Let me know if you’d like to talk about your particular market, concerns and circumstances. I’m always glad to talk with you.

Stay safe, home and healthy. Hopefully we’ll all be celebrating our release on Cinco de Mayo!

 

 

Photo by Jakob Owens on Unsplash

 


Posted on April 10, 2020 at 9:31 pm
Paul Isenburg | Posted in In The News | Tagged , , ,

Covid-19 and Real Estate?

There’s no doubt, there’s a lot of fear in our local marketplace. Today we saw our stock indexes drop by 7% and even the good news of great jobs reports from last week, major drops in the costs of oil and record low interest rates can’t seem to win the headlines against Covid-19. So what’s ahead for our market? I wish my bald head was a better crystal ball for knowing the answer but here’s some facts that you may want to know.

We’ve been dealing with this virus for over a month now and we just had an amazingly strong February real estate market. Prices were up, sales were up–even in the face of drastically lower supply of homes which meant quicker sales and multiple offers for Buyers to compete against and Sellers to rejoice in. On the Eastside, 51% of homes sold at or above their asking price, up from 37% in January and 32% a year ago. The percentage over asking price was 34%, compared to 20% a year ago. That’s up 70% compared to last year’s over-asking price percentage. Single family home prices are up 9% over last year and condo sale prices are up 7%.

In Seattle prices remained flat while supply of homes for sale dropped almost 50%. The percentage of over-asking price sales and full price offers went up, almost identically to the Eastside figures. The same percentages and changes occurred for condos in Seattle as on the Eastside. A very strong market by all measures and the same strength is evident from Skagit to Pierce County as well as on the west side of the Sound. Our region is humming along very well.

Photo by National Cancer Institute on Unsplash

With the announcement of Covid-19 in our local region, some are fearing a significant pullback in sales enthusiasm but that’s not translated to reality yet. Open house traffic has been pretty steady over the last couple of weeks. Only time will tell if a pull back will occur but so far demand is winning the tug of war. Typically supply begins to match buyer demand as homes for sale normally spring up like daffodils and tulips as our spring bloom begins. I see no reason to doubt this cycle.

Interest rates have declined to record low levels and this has balanced out the move up in home prices. If the stock market continues to struggle, we’ll likely see more investor flight to safety and security and that often means Mortgage backed securities–especially since the last major recession and the improvement to the quality of these securities. This demand for security by investors should keep our interest rates low and a lid on upward pressures.

The overall strength of our economy and businesses is unquestioned. The Covid fears and transmission of that into the world and local economies is near-term troubling; possibly longer term for some industries like the airlines, cruise ship travel and the travel sector as a whole, but most predictions are for a bottom to be near. Likely we sit still here while we get better data on Covid-19 incidence and health risks/remedies but most indications I’m seeing are still in strong support of American business strength and the American economy as a whole.

Fear may trap too many of us in our homes and cause unnecessary harm to restaurants, entertainment and small businesses.  That would be a shame as most people are not sick and need not live shuttered in and in fear. Simple precautions and steps will likely help all of us weather this storm of concern and infection. Treating fear is much harder than a virus and recovering from the unintended consequences can take much longer to complete.

I see no reason to anticipate or expect any significant decline in our sales or prices even if our economies are bombarded by the fear virus on top of Covid-19. The local economy is extremely strong and diversified. Employment and wage growth are active in most career categories. Business expansion is widespread and seems committed to completion regardless of any short term setbacks or surprises. I’d prefer we only deal with Covid-19 but it seems the fear virus is too intertwined.

Negative economic impacts will likely keep our interest rates low for the balance of this year, allowing more affordable payments for homes and a cash resource for those looking to spend some of the equity in their homes. I’m not always a big fan of spending our home’s equity but this is likely the best time to consolidate other debts you may have and likely still lower your monthly mortgage payment as interest rates are very near 3% for 30 year fixed mortgages.

So, what’s the likely effect of Covid-19 on our local housing market? Barring an unusual set of unlikely possibilities, it will hopefully be minimal. Obviously any given family can be upset to devastated by this virus. I hope none of us has the misfortune to suffer this. Let’s all agree that we won’t let fear rule our lives and dictate our activities to an unnecessary degree. Housing is a change and need-driven industry for the most part; we have all the change and need pieces in place to keep our real estate market moving ahead. Stay safe, be wise and we’ll all get through this together.


Posted on March 9, 2020 at 11:21 pm
Paul Isenburg | Posted in In The News | Tagged , , , , , ,

Buying In A Seller’s Market?

Our winter market has been exceptionally strong since late November. Homes in most price ranges and geographies have sold quickly with very little competition and lots of demand. This is great news for home sellers, so don’t doddle if you’d like to take advantage of these circumstances. For Buyers this isn’t so great. The stock market gyrations drove down interest rates to 5 year lows, as did economic worries and woes around the globe which increased buyer urgency to capture low rates and offered some relief for those “bidding” above and beyond Seller asking prices.

We’ve seen this scenario for the past 4 years now; a bit less so last year but still a strong winter to early spring market bounce. What we also saw the last couple of years were sales prices moderating in the “over asking” price range to more commonly in the 2-3, sometimes 5+% range. This is much better than in 2016 or early 2017 when 20+% was more normal for the winning bid over the asking price. So far this year, it seems to be mostly in this 2-3% range but activity has been very strong and I’ve seen some homes generating 10+% over their asking prices.

Over-asking price % chart

While our local market has great optimism and continued pricing pressure for home values, it’s important to recognize that if you are a Buyer have some patience, some time before you have buy and move in and some diligence in your efforts and readiness, you will likely be rewarded by waiting a bit in time. The last few years have seen a pretty dramatic decline in the percentage of “over asking price” offers and what some might think are overly inflated prices. This market shift has been occurring between mid-April and Mother’s Day weekend the last few years, so by very early May. That’s not great relief if you must buy/move now, but it can help you monitor the market for current data points on home values and then be better prepared when more homes come on the market later this spring.

We may see some rise in interest rates from the low levels we presently have, but most expectations are for interest rates to rise from the 3.375 range, back to our more normal level of last fall where 3.5-3.625 were the steady norm. Even if they climb to 3.75%, we’re still in very favorable ranges for borrowing. Don’t let fear drive your decisions. You may also want to consider learning about other possible neighborhoods or areas that might fit your life, school, commute needs, etc. and which might provide some variance to the price points and choices you’re seeing.

One final point for consideration; find an experienced, committed agent who will listen to you. You need experienced and calm help to guide your searches, prospects and offer processes. When the markets get heated, Sellers and their agents want to dictate and control as much of the process as they can. That’s a reasonable expectation. You need to have a known and respected agent, lender and support team to guide you in how to “show up” on an offer and in offer negotiations, so your offer is the best that it can be. There are a myriad of details and nuances that can improve your offer, besides just price. Believe it or not, price doesn’t always win. Sellers care about certainty in the buyers’ offers and that’s something you, as the Buyer, can control. I’m happy to help educate you on what makes the best offers and how to win when your new home shows up. Give me a call or email to meet and talk about your needs and concerns. We can set a strategy or timing plan to make you happy, better informed and ready to act and win.

 

Photo by Robson Hatsukami Morgan on Unsplash


Posted on February 6, 2020 at 9:55 pm
Paul Isenburg | Posted in In The News | Tagged , , ,

ULI’s Economic Forecasts Show Stability for US and us

Headlines of fear always get more notoriety than good news but here’s the most recent news release from the Urban Land Institute. They surveyed Economists  and analysts on the US Economy.

The report shows a persistently stable to robust economic expansion around the country. We have been on a prolonged skyrocketing trajectory that can’t be sustained, so look for stabilizing but not worrisome declines in our future economic data or real estate values. With the Northwest being at the epicenter of much of the US business growth, this is even better news for our local market.

Here’s their report

 

 

 


Posted on October 3, 2019 at 8:25 pm
Paul Isenburg | Posted in In The News | Tagged ,

Headed for Recession? What Does That Mean?

We’re all hearing headlines about a looming recession in the near future but what does this actually mean? In general terms recessions are defined as 2 consecutive quarters where the US GDP, Gross Domestic Product in our economy, declines. Since our great recession of 2007 to 2011 or 12, many fear hearing of this word. We need to remember economies and businesses have cycles; so a recession isn’t to be feared as much as expected. We’ve had 10 or so years of strong economic expansion, so we have to know or expect we’ll see some flattening or declines to come. The point being, most recessions are much milder than the our recent memories recall.

 

What happens to real estate in a recession?
Generally a mild pull back in prices occur but most often for a very short time frame. We’ve been seeing this pull back in prices since the summer of 2018 in many price ranges. Yes, we still see multiple offers in many areas and price ranges, but in the overall, the statistics show a decline in home values in most of King County, less so in Snohomish County and only minorly in Pierce County. More importantly, we are seeing interest rates declining, pretty sharply from last fall, so today we’re in the 3.75% range where last fall this was 4.875% or higher. This decline may well continue with the fears of recession, as the government tries to keep the real estate industry as active as possible. Again, an active real estate market is critical to an active and productive overall economy.

 

Can you tell which direction is “right”?    Photo by Leo Foureaux on Unsplash

 

 

Real Estate is Local I can’t emphasize this point enough. Yes, we are seeing weakness in many economies around the world and yes we are not immune to these fluctuations. That said, our local economy is considered one of the strongest and most diverse in the US. Sure we have to worry about trade wars, prices of exports, tariffs, etc. but we also need to recognize the continuing strength and demand of companies to move, grow and expand in our region. More so than most any other area in the US, we have a very strong growth component here and very resilient companies expanding in our region. Millions of square feet of office space is pre-leased and under construction. This means tens of thousands of new jobs for our area. Is there a minor dip in prices now–you bet, but in most cases this is 5-7% or less. Fear of recession and ignoring of the broader picture are mostly to blame. The companies moving and expanding here are making long range plans, well after any “news-touted” recession comes and goes. This area has been more resistant and resilient to recession than other parts of the country and this growth will only reinforce this resilience.

Shouldn’t I wait for a bottom if prices and interest rates are lowering? As the adage goes, you can only see the peak or the bottom of a valley in the rear view mirror. Are you looking to buy a home for a longer range investment? I always encourage buyers to think and act long term. Buy when you have a true need or desire. If you’re looking to flip houses, our market has been tough for the past 5 years. If you’re looking for a home, we’re in the best market conditions we’ve had for at least 3 years. Inventory is up; buyer’s have selection. Sellers looking to stay in our area can finally find homes to buy before they sell. Financing options and market conditions are now available to help you transition to your new home. So yes, you can wait, hope to time the market to your best advantage but this means being constantly involved, diligent and immersed in the area you want to be in. Micro markets are the norm. You can’t generalize that $600K price range in Kenmore is the same as in Bothell, or one area of Kirkland, Bellevue or Redmond is the same as other areas of the same city. They most likely aren’t. What makes more sense is to determine what you really want to find; what style, size, neighborhood, price range, etc. works best for you and be prepared to act when an opportunity arises. Don’t be surprised to still be in multiple offers.

Fall is generally a very active market. Once kids are back to school and vacation season is mostly over, real estate activity normally increases. More new homes come on the market. Interest rates make them more affordable and price/cost conscious buyers are back to actively looking. People planning to work for Amazon when they make a bigger move to the Eastside, or Facebook, Google, Microsoft are looking now; not waiting until 2022 or 2023 when then know 50,00+ new jobs and workers will be here in the search. You can capture that future demand and home value appreciation by buying now. You’ll still be in that home in 3 years and smiling at your wisdom of looking while the pace was slower and the best interest rates in almost a decade were yours.

So are we headed for a recession? Who cares isn’t the right answer, but neither is seeking shelter from any fallout. We are and will continue to be fine, resilient and leaders of any turn around and rebound in the economy. If your job is secure, chances are your wages are up and your future is brighter than the doomsday headlines. Don’t be frightened by what won’t happen. Look at what is actually happening and believe in these actions and activity.


Posted on September 25, 2019 at 6:16 pm
Paul Isenburg | Posted in In The News |

i-Buyers and the Changing Face of Real Estate

Photo by Valentin Petkov on Unsplash
Photo by Valentin Petkov on Unsplash

Technology and outside businesses, mainly backed by financial firms and venture capitalists, are fiercely competing and investing to get deeper into the real estate business. For the past 10 to 15 years these efforts have had minimal success. With their focus now more narrowly set on the amount of money involved in the US residential real estate market, the number of entrants and entrepreneurs involved is growing and some of their efforts are starting to take hold and create opportunities for them and for you as a home owner, seller, buyer or investor. I thought I’d offer some perspective and recap on these latest efforts and coming opportunities. Most of these programs are not yet available in the Seattle  market or throughout much of the country, but they likely will be soon, covering most metropolitan markets in the country over the next few years.

A Brief step back in time:
Roughly 20 years ago “Big Data” became a business mantra and the collection, study and mining of this data has created huge businesses. How this relates to you is often by simple, voluntary efforts or moves on your part. You went on Zillow, Redfin or other such sites to see what some algorithm, right or wrong, said your home was worth. You plug in your home’s data, maybe some information about yourself and improvements you’ve made to the home to improve the valuation and this data is then collected, shared, bought, sold and studied; and you get some valuation data point.

Other companies scour public records for data on individual properties, sales records, prices and area turn-over rates. Some real estate Multiple Listing Services also share or shared their data on sales; size of homes, yards, loan amounts, financing types, etc. Combined, this information became a rich data source for companies to “mine” to generate trends, improve their algorithms and valuation tools, so you’d come back again for a new valuation. It also led to a new technology, Predictive Analytics. How soon will you sell your home? This technology was then marketed to agents to “farm” the most likely home sellers in any neighborhood or region of the country. Right or wrong, this is considered a more accurate “target” for agents to buy the data on and make contact with you, the home seller. This system has worked for some agents and companies but not to the degree that most financial-firm backed companies needed to see to get more money from investors to find you and get you connected to them.

These predictive analytics, along with programs like Zillow’s “make me move” helped these companies create larger groups of home owners who were likely to sell, have inquired about their home’s value and stated a price at which they’d sell their home. This refined database, created by Big Data companies, is then used to solicit more capital from investors to create more new real estate companies to meet you.

Enter the I-Buyer
Now the i-Buyer, instant or Internet home buyer arrives. Today, several of these companies and their private investors exist, many run out of companies based in the Seattle area but not offering these services here yet. If you want or need to sell your home, you’ll go on their site and they will tell you in an instant, how much they will pay for your home. No questions, no frills, no hassles; they buy your home.

This convenience may be worthwhile to some home sellers, but, of course, most of us ask, “but at what price?” That varies with the property, the company and the seller. What this isn’t, though, is a negotiation. They don’t offer you a price to which you counter and go back and forth. This is a price, take it or leave it. Most of these companies admit they only buy about 10% of the homes they bid on. However, in the process of this conversation and bidding, they now know you, your property, it’s improvement details, when you want to be sold and moved, etc. A great data collection tool; information you willingly gave them, even though you didn’t end up selling your home to them. They got value from you; you got frustration from them.

Now comes the next step. They have all of your contact and property data and can now refer you to an agent in their company to help you market and sell your home on the open market, or they can now sell your information to any agent willing to pay for it, to farm, prospect or pursue you to sell your home. Big data has gathered and entwined you in their data web, as you provided more data about you, your circumstances and the property, which makes their improved data more valuable. This is a key goal for  these new entrants; to be a giant lead generation system for them to use or to sell to anyone and you voluntarily stepped into it by innocently asking what’s my home worth or what would they pay for it.

So What’s the Concern?

This can be seen as sinister; entrapping you and your data; selling it to others to pursue you and your property.  These companies see it as a way to control owners, sellers, buyers and property. Under the guise of convenience for you, they’re collecting huge amounts of data or ownership on homes around the country. Several of these companies now own thousands to tens of thousands of homes in various markets. They also now have a database of homes they know people want to sell. This provides them lures to attract buyers by marketing these on or off-market homes to buyers searching on their websites. They don’t need to be listed for sale by an agent, company or in a Multiple Listing Service. The company controls the data. If a buyer is interested in a home, the more valuable that piece of data becomes. Need financing to buy one of their homes? They’ll send you financing quotes with the click of a button and a bit more data from you. Want to “trade” your home for one of these new homes? They’ll offer you an instant buy out for your home and you get to buy the home they own. It’s quick, hassle free and you get to avoid talking with a real estate agent.

Photo by Mariann Gyorke on Unsplash

Are you more than data? Shouldn’t your goals be the focus?   Photo by Mariann Gyorke on Unsplash

Now that they have all this data on you as a buyer, seller or both, they also know what “normal” expenses, steps and services you might also need or want. Home movers, cleaners, craftsmen, painters, plumbers, roofers, landscapers, electricians, security and insurance companies, title and mortgage services, etc. Venture capitalists back these companies that are buying into or outright ownership of these providers and services. They are signing up thousands of service providers to send your way—as long as the service provider pays them a fee to find you.

Amazon just partnered with the largest real estate parent company in the country to provide $500-$5,000 worth of services and products to every home buyer who works with one of these brokerages, depending on the price of home you buy. That’s not a great buyer incentive but it is a small loop to have you step in to gather more data on you. The more of these services and products you buy, the more data is collected on you and your buying habits. The role of the real estate transaction or even your innocent inquiry into “what’s my home worth” has spiraled into an amazing tie-in of data and possible revenue. Real estate has the most tentacles into all businesses in the economy. It’s a central role that large financial firms and big data companies now want to be a bigger part of.

Again, this isn’t meant to be read as sinister or even unusual or unique to the real estate industry. It’s just to enlighten you as to why, how and where the payoff for these new companies is coming from. You are the bait; that part is real and undeniable. These venture-capitalized companies claim to care about you but if their market price offers are so fair, why are only 10% of them accepted? Some of these companies state their Investors aren’t  expecting a return on their money, seeking to just revolutionize our antiquated industry! Really? They invest $200-300M with no expectation of a return on their money? Zillow claims to be losing $2-3K per house right now, but expect to make that up by the collection and sale of their data and other services going forward. As a Realtor for 33 years, I’m bothered by this idea of my clients as bait. I am always happy to offer you an honest valuation for your home or property; for free, no big data collection, just honest conversation about your goals and options to help you get there. Can I buy your home today or this week? No, but I can help you find real alternatives that focus on you and your goals.  The point being, my focus is on helping you solve your problem; their focus is on your data.

These are big purchase and/or sale decisions and the majority of people still want experienced, competent help, guidance and advice with this process. An Instant Offer may be a solution but just be aware what their real focus is, your data vs. your problem. They’ll make money from your data regardless of the outcome or concern for your goal or needs. If you’d rather the focus be on you, your options and real solutions to your problems, give me a call. There are always nuances in the market and you will benefit from understanding them and how they affect you.

 


Posted on August 12, 2019 at 10:06 pm
Paul Isenburg | Posted in In The News | Tagged , ,

Home Buying Confusion–On the Path to Chaos

In our increasingly global economy, outsiders from everywhere in the world want an “in” to the U.S. real estate market. There seems no end to the amount of money people, companies and investment groups can and will spend to get in to our market. Most claim they “know” how to improve efficiencies, speed up and simplify the processes, save consumers money, aggravation and eliminate the need to talk withe lenders, agents and Realtors. Funny thing is, almost none of these people, investors or companies have any actual real estate industry experience. They speak with supposed authority from a 40,000 foot perspective. None of them recognize a fundamental that every Realtor, agent or loan officer who has survived in this industry for more than 5 years knows–this is a people business, not a commodity or even transaction business. People have personalities, unique needs, circumstances and subjective criteria driving much of their decisions about real estate.

There are Disruptors in every business or industry out there; some better than others with some industries better suited for Disruptors than others. The point being, most of them only want to talk about efficiencies of removing the people, the conversations, the variables and the calculus of weighting all of these market and subjective factors for any one person’s circumstances. Home buyers can look online and get computer generated valuations for most properties, but is that really what they’re worth? According to who and what criteria?

Many think they know what it takes to write a winning offer. They aren’t seeking the advice and counsel of an informed agent in the area they are looking in. They only find out what doesn’t work when their offer is rejected and the home is sold to a different buyer. How can an automated company, unwilling to talk about all of the options you may have available, answer this? It’s not usually just about price. What makes a better  offer varies with every property but usually requires a conversation with the buyer, the seller’s agent and the lender involved. Find the common ground and solutions to win and get the home. This takes a willingness to care, to listen, to educate and to be involved. Putting a priority on what’s the most efficient use of the agent’s time shouldn’t be in the matrix of factors for your offer.

New tools and technologies can help make the process more efficient but they can’t replace true conversations, understanding and educating. While Disruptors and Outsiders see buyers and sellers agreeing to sell a home or property, they don’t see the relationships and the time it took to build them, to gain buyer and seller trust with their agents and lenders and to work together to  benefit their clients and customers. With all the promise of new widgets and gizmos to make this process simpler, easier and better for the consumer, they don’t
have a way to replace the simple fact that this is a people business. One that requires people talking, educating, understanding, coaching, assisting and counseling Buyers and Sellers on how to find the best opportunities in any market for their actual needs. Speed or simplicity may be “a” factor for some, but when we’re usually talking about people’s long-time homes to buy or sell, speed or simplicity are only a couple of many variables likely considered. Sadly none of the rest will ever be known without an actual conversation with an informed agent or lender to help you.

No one person, group or company will stop Disruptors, but on their present course, the simplification will only lead to more chaos. Information is getting easier to find but knowledge and the ability to apply it are getting more rare. The cost is usually the same for an ill-informed or under-informed person, company or program to help you. Why not get real advice  from a quality agent or lender who will truly benefit you, saving you time, frustration and effort as a Buyer or netting you more for your home as a home Seller?

 

 

You may know where you want to go but how do you get there?

Photo by Andres Haro on Unsplash


Posted on March 7, 2019 at 12:38 am
Paul Isenburg | Posted in In The News | Tagged , , , , ,