Monthly Archives: May 2005

Tuesday, May 31, 2005 at 03:50 PM

1:45 PM – 2:30 PM – "EJournalism: The Next
Generation – The Video News story, Blogs and I-Pod Casting." Brad
Inman, founder Inman News Features, and NAREE past president. –
Auditorium, lobby level, National Association of Home Builders (NAHB)
Headquarters Building, 1201 15th St NW.

Posted in Moblogging in Real Estate

Globe warns “Mortgage trend poses risks in downturn”

Globelead_053105My compliments to the Boston Globe for running their third front page story on real estate in the last four weeks (see previous blog posts on May 20th and May 3rd).  Today’s lead story, Mortgage trend poses risks in downturn, is the first to raise cautions about the downside of the real estate bubble to the lead headline and includes an alarming graph showing that interest-only loans and adjustable rate loans made up about 70 percent of all loans in Massachusetts last year, and just under 60 percent currently.  Those market trends are even more troublesome when one adds no money down deals or sub-prime loans.  According to the Washington Spectator, one in four loans nationwide involve sub-prime loans. 

So what is any ordinary buyer to do now to protect themselves, now that there are signs the real estate market has peaked as reported six days ago in another Globe story entitled:  State home sales sag 10% in April?

Posted in Real Estate Bubble

“That man is richest whose pleasures are cheapest” – Henry David Thoreau

3mil_sale_v_list2003_2A New York Times article entitled "Billionaires Beware This Bubble"
reports that Worth Magazine’s cover story this month "makes a
convincing case that there
may be a bubble on the extremely high end of the market."  While overly
optimistic resort developers believe that the rising number of wealthy
households will offset downward pressure felt in other price
ranges, MIT Economist William Wheaton argues that resort buyers will
substitute "the next mountain or beach or lake" in search of lower
prices, and Christopher Mayer of the Columbia Business School says that
supply will "outstrip demand, depressing prices."

Falling high-end prices are not limited to resort communities.  In a
March 2005 article on their Luxury Housing Affordability Index, Business Week
reported that "Luxury housing became significantly more affordable in
Boston and Chicago, where prices fell a little over 10%; in Miami, down
6%; and Washington, D.C., down about 7%."

A year earlier on Valentine’s Day 2004, The Real Estate Cafe
released it’s own study entitled "Sweetest Deals of 2003:  The Year of
the Million Dollar Markdown."  At that time, only 50 properties in the
MLS had ever been marked down by $1 million dollars in Greater Boston
and 30 of them occurred in 2003.  That price correction helped trigger
a comeback and record setting pace for luxury homes in the first
quarter of 2004.

What’s happening now in the multi-million dollar price range in
Greater Boston? 

Posted in Defensive Homebuying, Down home, In the News, Real Estate Bubble, Savings & Rebates

Single family sales drop 10% in MA

Rerealitycheck1_1Real estate headlines seem to be everywhere these days, from today’s lead story in USA Today, — the second in two weeks, to Monday’s "Condo a Go-Go" story and slide show in the New York Times, to Saturday’s story in the Washington Post about a Playboy centerfold who is giving up her modeling to become a real estate investor. 

Despite those sexy news angles and industry spin that "everything is coming up roses," the most revealing finding for home buyers and sellers in Massachusetts is today’s Boston Globe Business headline: 

State home sales sag 10% in April

According to the Massachusetts Association of Realtors, the number of single-family homes sold in April was down 10.4 percent
from 2004, marking the first double-digit
decline since April 2003.

Posted in Defensive Homebuying, In the News, Real Estate Bubble

Monday, May 23, 2005 at 06:49 PM

All marketers are liers.

The guys who should …

Send Seth email re dual agents.

Marketers that say one their and

Stories that actually improve the

The story about the wi

Nothing is good or bad

We have

Wants are what we tell ourselves

Consumers are the ones who are lying

If someone is not prepared to tell a lie,

We should not be so

Make people happy they do business with you?

Cynical way to do business

Posted in Uncategorized

Three Percent Drop or The China Scenario?

Globe_neep1_1Two weeks after we challenged frothy assertions
about the housing market in a page one story in the Boston Globe, the
real estate bubble is back on the front page.  This time instead of
quoting brokers and builders, the Globe turned to a more credible
source:  the New England Economic Partnership.  They forecast "a modest
housing slump in Massachusetts that will last through early 2007, with prices,
at the bottom, declining about 3 percent." 

While NEEP projects that falling prices will be offset by a strengthening regional economy, Princeton Economist Paul Krugman paints a much bleaker scenario in his editorial, The Chinese Connection, in today’s New York Times. Here’s a snippet:

"Here’s what I think will happen if and when China changes its currency
policy, and those cheap loans [to the US treasury] are no longer available. U.S. interest
rates will rise; the housing bubble will probably burst; construction
employment and consumer spending will both fall; falling home prices
may lead to a wave of bankruptcies. And we’ll suddenly wonder why
anyone thought financing the budget deficit was easy."

Earlier this week, Krugman told an audience in Bangkok, "There is a real bubble mentality in the US housing market,” adding that prices of US housing were 250% of their real values.

So if one’s perception of the regional, national, and global
economies determines one’s belief about whether the housing bubble will
deflate or burst, where do you stand?  We’d love to hear your
perspective, particularly if
you are buying or selling this Spring.  (If you do decide to buy
despite the real estate bubble debate, we invite you to use our commission rebates as a cushion against a loss in value.  If you’re selling, why not try for sale by owner to maximize your equity particularly if prices begin to slide in the second half of 2005?)

Co-authored by Bill Wendel and Douglas McCarroll, our newest real estate consultant / buyer agent at The Real Estate Cafe

Posted in Real Estate Bubble

$60 Billion question: How do consumers uncouple real estate commissions?

Cnn_overpaidpoll051805_1Steven Pearlstein of the Washington Post hit the real estate cartel with a one, two punch today writing a hard-hitting column entitled, Realtors Aghast At Notion of Competition, then hosting an hour online discussion where consumers — 84% of whom feel that real estate agents are overpaid according to a recent CNN/Money poll — underscored the importance of the DOJ and FTC’s "laudable campaign to bring price competition to one of the last outposts
of cartel-like behavior

After more than a decade of advocating industry reforms it’s a pleasure to have the press championing the cause and for Pearlstein to respond to my question during his chat:

Boston, MA:
Does the negotiate your own fee, "bring your own broker" (BYOB) compensation
plan you suggest in the final paragraph of your column require the uncoupling
of the traditional two-sided real estate commission? That seems to be
the glue that holds the MLS together and commissions artificially high. How
do consumers as a group or individual buyers and sellers get there from here?

Steven Pearlstein:
Well, that’s the $64,000 question (or should I say the $60 billion one, which
is what brokerage fees were in the U.S. last year). I think it will require
some changes in state and federal laws (such as on whether brokerage fees
can be financed), professional codes of conduct and a change of heart at
the National Association of Realtors. If there is no change, however, the
system will eventually change on its own as Internet brokers gradually increase
their market share and lower prevailing commission rates.

Will Pearlstein and others in the press follow-up with more coverage?  Will consumer advocacy groups, like the Consumer Federation of America, once again champion commission reform particularly the ability for buyers and sellers to finance fees outside the traditional two-sided commissions?  With their support, new groups like the National Association of Real Estate Consultants can move the industry towards a tipping point where "The next major revolution in real estate," as the former chief economist of the National Association of Realtors once predicted, "will be fee-based services replacing the blanket commission pricing that has dominated the industry for so long."

Posted in In the News, RECALL: Real Estate Consumer Alliance

Somewhere over the Rainbow

Today marks the 150th birthday of L. Frank Baum, author of the Wizard of Oz. 

High cost of housing leaves some Bay Staters stuck as renters

Middle-class families lack funds to escape apartments for homes

Posted in Uncategorized

About The Real Estate Cafe

Recafe_1995_1The Real Estate Cafe’s mission is to help real estate consumers save
money — an estimated $30 billion annually according to McKinsey &
Co. — by harnessing the money-saving power of the internet.

Opened in 1995, the original Real Estate Cafe was the nation’s first
internet-based, walk-in housing information center. With 1,200 square
feet of retail space, the original cafe was part bookstore, part cafe,
part adult education center, and part real estate office.

After two years of pursuing dreams, which included a
consulting assignment with the UN on our proposal to use real estate
revenues to provide shelter subsidies for AIDS orphans
, The Real Estate
Cafe achieved
another industry first:

In July 2003, we became the first real estate company in the nation to enable
consumers to access MLS listings from the convenience of their own cell
phone through our "Take-out Menu."

Posted in Inside The Real Estate Cafe

For Sale by Owner

Hot_stuffHow hot is the real estate section of, the online counterpart to The Boston Globe?  A recent email sent to online advertisers reported these stunning statistics: 

" is proud to announce that in March 2005, traffic to our Real Estate section surpassed 7 million pageviews for the first time in history… with more than 1 million homes-for-sale searches conducted that same month…"

With traffic like that and a starting price of just $69 for a two week ad, The Real Estate Cafe recommends that anyone selling "for sale by owner" should include in their marketing mix (and it’s not because we are pleased to be a long-time advertiser on their open house search page.)

Looking for another best practice to increase your exposure?  Place an inexpensive one line listing in the Globe’s Friday open houses section (shown in the photo above) but be sure not to miss their deadline: 4:30pm on Wednesday.

More best practices and hot tips on how to sell your own home are now available in your own home.  Call 617-661-4046 or email for an appointment.

Posted in FSBO: Best Practices
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