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Back to the Future: Save billions in real estate fees by 2020?

Twenty-three years ago today, Ralph Nader energized a budding buyer brokerage movement with his first speech on real estate. Since then real estate consumer advocates have suffered numerous defeats, and homebuyers and sellers are literally paying the price… cartel pricing on real estate commissions in an industry that’s been able to avoid disruption.

Can a new crop of money-savings real estate business model push the industry to a tipping point?  Maybe — even the real estate industry admits there are fifty ways they’re vulnerable to disruption, see

Back to the Future

The Consumer Federation of America first called the real estate industry a cartel in 1991, and predicted that consumers would save ten billion dollars annually simply by uncoupling the two-side commission (something that still has not happened).  That was pre-internet.  By the end of the decade, McKinsey & Company estimated that potential savings could rise to $30 billion annually because online real estate transactions would create efficiencies and reduce fees from real estate agents and mortgage brokers.  Regrettably, that still has not happened.

In retrospect, maybe it was fitting that Nader’s 1992 speech was on October 28, the Feast of St. Jude — the patron saint of lost or impossible causes.  Rather than hiding from our shortcomings, innovators are invited to engage in smart failing exercises.  Further, All Saints Day and Day of the Dead provide an opportunity to honor fellow real estate consumer advocates who devoted their lives to changing the industry.  In his new book, Nobel prize winning economist Robert Shiller criticizes overly enthusiastic perceptions of FREE markets; and highlights the importance of unknown “heroes” willing to step in and protect consumers when regulatory agencies and politicians sit on the side lines — silenced by politics or legislation written by industry lobbyists.  That certainly was the case for Bill Dennison, Ken Knapton, Jerilyn Coates, and Becky Swann.

Our shared money-saving mission

Finally, we’re not given up hope on our own life’s work.  For our 20th anniversary, Real Estate Cafe has set twin goals:

  1. Co-creating an open ecosystem in real estate capable of delivering $30 billion in consumer savings annually by the year 2020; and
  2. Redirecting 10-20% of those savings to non-profit initiatives or impact investments.

We’d like to invite the next generation of money-saving real estate business models, DIY homebuyers and sellers (FSBOs) to join us in that five year campaign by using the hashtags #RE2020 and #ImpactREbates every time they save money, make a donation or an impact investment.

New opportunity to hack real estate?

What’s more likely to happen first, the Chicago Cubs will win the World Series as predicted in the movie, Back to the Future II, or a consumer advocates will break-up the real estate cartel? Thankfully, after twenty-thee years, we’re not the only ones still excited about the potential for new digital technologies to transform the real estate industry.  In this May 2015 article in FastCompany, @Ideofutures says “real estate tops the list of industries that blockchain could disrupt”: (please share this tiny URL)

Real estate consumer advocates and technology innovators inside and outside the industry may have the opportunity to test that hypothesis at a hybrid online and in-person hack at MIT called FutureCommerce: (please share this tiny URL)

Next Steps

Real Estate Cafe is eager to seed a real estate track within the event and have offered to facilitate visioning exercises to help participants think beyond the existing real estate business model to an open eco-system capable of delivering billions annually in consumer savings.  If there is sufficient interest, we’re willing to begin real estate working group BEFORE the actual event on November 20 -22, 2015.  Let us know if you’re interested by emailing

Posted in Blockchain, commission rebate, Disrupt Real Estate, Impact Rebates, RE2020, RECALL: Real Estate Consumer Alliance, reVRM, Savings & Rebates, Tech Trends, Unbundling the Commission

Out Bid or Out Dated: Industry & media hype missing Bidding Wars trends?


This started as a comment on BostonBubble, a decade old forum that’s enabled homebuyers in Boston to share headlines and perspectives about what’s really happening in the Boston market.  A recent article that predicts the Boston housing market will cool this Fall has attracted more than 400 views and talk about meeting offline meet offline for a “Bubble Hour.”

Nothing is planned yet, but this Boston Globe story might be reason enough to meet sometime next week:

Outwit, outbid, outlast
For today’s buyers, the housing market is a lot like a reality TV show. There are multiple players, big money at stake, and dashed dreams. But keep at it, because procrastinating might wind up costing you more.  (please share link via social media)

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From my perspective as a buyer agent who has written numerous stories on the need to reform BLIND bidding wars, there’s much more to the phenomena than reported. Opinions aside, the story is also flawed in a number of other ways. For starters, the Globe used sales statistics from 1Q2015 rather than the second half of summer which one Belmont listing broker recently describe as “dead.”  It’s not hard to imagine that price reductions might be outnumbering over asking price offers since the stock market plunged in late August.  Perhaps those more recent trends might explain the disconnect between the Curbed Boston’s predictions for Fall 2015 and the Globe’s story.

My sense is that readers of Boston Bubble could crowdsource a more accurate story. Should they try?

Or should homebuyers take a different, more quantified approach? Here’s a flashback from April Fool’s Day 2015:

Fooled again? Let’s use tech to reform real estate / BLIND biddings wars  (please share link via social media)

As we know from the past three years, it takes time to do the investigative reporting necessary to expose what’s going on behind bidding wars, but here’s an example of what’s possible:

Bidding War Drone: In-House Intelligence Report raises questions  (please share link via social media)

Would any BostonBubble readers be willing to crowdfund a Bidding War Lab so the Boston Globe never has to write, “Statistics on the number of homes that trigger bidding wars — and hence disappoint multiple families in a single swoop — are hard to come by, …”

It appears that they’re unaware of our blog, or choose to ignore the track record we’ve demonstrated with posts like this:

Will runaway bidding wars create real estate refugees in Cambridge? What would MLK do?  (please share link via social media)

Posted in Bidding wars, Bubble Hour, Consumer protection, Crowdsourcing, Defensive Homebuying, Housing bubble, Investigative Reporting, Market trends, Seasonality, Timing the market

#ImpactREbates: Can we crowdfund social good out of real estate rebates?

Historically, September has been a big month for Real Estate Cafe, and this year a series of anniversaries are aligning with an exciting opportunity:

10th anniversary of feature story in Boston Magazine,
20th anniversary of Real Estate Cafe, and
25th anniversary of our predecessor — Mass. Homebuyers Club.

Rather than focusing on the past 20-25 years, we’re asking “where will the real estate industry be in five years?”  More specifically, we’d like to answer that question by inviting innovators and consumer advocates to co-create an open ecosystem capable of delivering $30 billion annually in savings by the year 2020 — a campaign we’re calling #RE2020.

Better yet, we’d like extend the benefit of those savings by asking recipients to donate a portion of their rebates to non-profits or initiatives promoting Social Good.  We need social entrepreneurs to help us develop a strategy to crowdfund their own efforts through real estate rebates.

That’s why we’re so excited that the Real Estate Cafe’s 20th anniversary aligns with the start of #uLab. Knowing that nearly 30,000 people from 182 countries have already signed up to participate in this MOOC (massive online open course), we invite social entrepreneurs and real estate innovators to explore collaborations.

Think of it as pay-it-forward or rebate-it-forward meets money-saving real estate business models. That’s why we call them #ImpactREbates

Here’s an example of what we’ve done in the past with our “Community Commission” and an open fundraising idea submitted to the MIT Ideas competition called ASAP: AIDS Shelter Alliance Partners.

If you’re a dreamer, doer or reincarnation of Don Quixote, how can we help rebate fund your #uLab dream?


Posted in "We" companies, ASAP: AIDS Shelter Alliance Partners, commission rebate, Crowdfunding, Impact Rebates, Pope's Encyclical, RE2020, Real estate philanthropy, Real estate rebates, Savings & Rebates

Disrupting real estate: What’s Pope Francis got to do with it?


Calls to disrupt residential real estate have echoed inside and outside the industry the past year, but no change will come close to the impact of climate change.  The Pope’s encyclical — On Care for our Common Home — begins with the environment but goes further, calling for a wholistic or “integral ecology” – a change of heart that grows into a community of care.

What implications does that call for conversion have for lifestyles, housing, and cities?  Last month, the Pope invited 60 mayors from around the world to discuss those questions, and pledge their commitment to address climate change and inequality.  What role can and should housing activists and real estate professionals play?

Is the industry ready for a reformation movement, or will it reject the Pope’s message?  After reading the only story so far in Inman News, the leading real estate technology news service, we sent the following Open Letter to them asking for another story on the Pope’s visit from more important angle.  We look forward to their continuing coverage.

Short-term rental owners set to profit from upcoming East Coast pope visit
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Greetings, Inman News,

I’ve been a long-time reader, sometime contributor and one of the leading voices over the past 20 years calling for industry reform or in more recent lingo — “disruption.” See most recent guest opinion just over a year ago:

Harnessing the winds of change (10/9/14)

During the past two decades, nothing — NOTHING compares to the disruption the Pope is and will be talking about. Whether it’s preparing for devastating changes that will disrupt cities like Boston — where today’s 100 year flood will be an annual occurrence in 2050 and a twice a day tide by 2100; or calling for an integral ecology that values a “community of care” more than luxury real estate, the Pope’s visit will be a teachable moment for the industry.

In today’s MOOC “Massive Open Online Course” world, one could argue that teachings are best absorbed when content is broken into easily digested modules that can consumed overtime. One could also argue that we look more to peers, than to authority figures, to facilitate learning by peer-to-peer discussion. With that in mind, I ask you to consider this Facebook thread, and to think about what role Inman News might play:

Note, there are nearly 70 million Catholics in the US, or one in five people. Percentages are higher in some states, like Massachusetts where nearly half the state — or roughly 3 million people — are Catholics. More importantly, the Pope has a 90% approval rating and is a moral leader who champions the needs of the poor by consistently speaking truth to power.

Like Al Gore’s movie, An Inconvenient Truth (2006), the Pope’s encyclical has some truths that make make real estate elites squirm — like the fact that not one single county in the US has enough affordable housing (see recent headline in Fortune magazine):

It’s a message that Inman readers need to hear more than who’s profiting from short-term rentals because the long-term implications of that imbalance, and numerous other themes in the encyclical will help shape the future of housing, cities, and the planet itself.

What’s the best way to get the real estate industry into that conversation?

CARPE DIEM: In advance of his visit to the US, September 22-27, 2015, Pope Francis has called for a “World Day of Prayer for Care of Creation” on Tuesday, September 1. My goal is to invite fellow real estate agents to begin reading the encyclical the next day and to continue reading for 40 days: 20 days before and after the Pope arrives in the US. This should be a team effort, so readers are invited to contribute to this working proposal…

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Posted in Consumer protection, Disrupt Real Estate, Housing Justice, Impact Rebates, Luxury homes, Mlllennials, Pope's Encyclical, RE2020, RECALL: Real Estate Consumer Alliance, Spiritual Home

Cross-examination: Has Redfin lost it’s religion?


Excellent article by VOX on the evolution of Redfin, but it would be improved by a critical cross-examination of statements like this from Redfin’s CEO Glenn Kelman:

EXCERPT:  Redfin set out to change real estate. Then real estate changed Redfin.

“…the original, bare-bones [Redfin] brokerage model would never appeal to a mass audience. So in November 2008, as the real estate market was imploding, Redfin took the plunge.

‘Redfin started life as a cult,’ Kelman wrote on the Redfin blog. ‘But our goal has always been to become a religion.””


Discussion point #1:

The article goes on to talk about how Redfin reduced it’s commission and began taking listings which from my perspective as an believer in the Common Law of Agency, is the equivalent of losing their religion.

Is that too critical an assessment, or do others share that perspective?

Discussion point #2:

No doubt Redfin’s brand has loyal followers — an estimated 6 million unique site visitors each month:

But like other Mega-Brokers, does their desire to build market share undermine their capacity to act as a fiduciary for individual homebuyers, when there are fundamental conflicts of interest?

1. Dual agency / Designated Agency
It’s impossible to simultaneously try to get the highest price for home sellers and the lowest price for homebuyers, and

2. Competing buyers in-house
How does an individual homebuyer benefit when their brokerage is representing competing buyers interested in the same property?

Discussion point #3:

To what extend does the mainstreaming of Redfin’s business process and reduction of their rebates reflect pressure from outside investors who together have put $165 million into the company over the past decade?

Does their desire to become a national brand leave them vulnerable to more nimble network of independent brokers who can offer both deeper discounts / larger rebates without conflicts of interest?


To underscore the benefit of working with small independent brokers or “indie” agents and Redfin’s lack of credibility as a a religion one simply needs to question two assertions on their home page:

1.  Can you really tell competing buyers you are going to put them first when you’re submitting competing bids on the same property?

2.  If I am a buyer, particularly one who has been burned repeatedly by bidding wars, do I really want to work with a buyer agent who’s website boasts, “Turn one offer on your home into a bidding war?”


From our perspective as consumer advocates over the past 20 years, those questions expose some of Redfin’s conflicted beliefs.  If you’ve lost faith in their brand, you’re not alone and we invite you to learn more about our crusade — #RE2020. Our mission is to raise awareness about money-saving real estate business models who collectively could empower homebuyers and sellers to save $30 billion dollars annually by the year 2020.

Redfin set out to change real estate. Then real estate changed Redfin.  Real Estate Cafe has remained true to it’s original mission and our DIY homebuyer clients.  And we’re not alone.  There are other money-saving business models who still walk their talk, plus some impressive new start-ups who have responded to calls to disrupt real estate.

Follow #RE2020 on Twitter to learn more.

Posted in Bidding wars, Buyer agent, commission rebate, Disrupt Real Estate, Dual Agency Detective, Fee-for-service real estate, RE2020, Real estate rebates, RECALL: Real Estate Consumer Alliance, Savings & Rebates

WANTED: Innovators & advocates to help real estate consumers “save tens of billions annually” in fees


If you scan the months listed on the right side of this page, you’ll see a gap between blog posts during October 2014 and January 2015:

10/07/15:  Disrupt, reform or realign real estate: Opportunities to connect dots & build synergy

10/09/15:  Using calls to “disrupt real estate” to raise awareness of money-saving alternatives


01/08/15:  Collaborating with housing & real estate labs to save BILLIONS annually!

01/17/15:  CFPB & FTC protect options, empower real estate consumers to save money

During that gap, we weren’t idle…. Like many other real estate innovators, we were repeatedly posting comments on a controversial article in Enterpreneur Magazine entitled:  “Who will step up and disrupt the real estate industry”?  In the background, we were also quietly organizing an event to introduce innovators to leading real estate consumer advocates.  As the image and text above shows, we used the 262 anniversary of the Boston Tea Party to host a conversation about co-creating an open ecosystem in real estate by the year 2020, capable of delivering billions in consumer savings annually. (Hashtag:  #RE2020)

As we blogged yesterday, we hope to use a number of upcoming anniversaries to expand that conversation and continue to respond to calls for change coming from inside and outside the real estate industry.  Our goal is to encourage innovators, reformers and money-savings real estate business models — not to mention millons of DIY homebuyers and sellers — to think of themselves as a movement and to explore ways to create synergy to expand consumer savings.  As an informal group or adhocracy we call RECALL:  Real Estate Consumer Alliance, our hope is to deliver $30 billion annually by the year 2020.  Want to know where that figure came from — see the use of the phrase “tens of BILLIONS” (emphasis added) in the transcript below:

Congressional Hearing:  The Changing Real Estate Market (please share via social media)

FLASHBACK: Congressional Hearings on Anti-Competitive Real Estate Practices

Saturday July 25 is the 9th anniversary of congressional hearings on anti-competitive business practices in the real estate industry.  Industry insiders have been digesting an extensive report by Inman News on the possible impact of the current wave of money-saving real estate start-ups.  You can learn more about why survey results should catch the attention of anti-trust regulators again by reading this blog post and scanning the Facebook comment below:

07/17/15:  Will fee-for-service movement launch “Agency Revival” or DOJ/FTC inquiry into real estate?




IDEA STARTER:  Should we host a virtual conversation to take a look back at the Congressional Hearings on Anti-Competitive Real Estate Practices and a look forward at the impact hybrid real estate models may have on the industry?  You can begin engaging that topic on the link below.  What other questions should we seed beforehand and who should we invite to participate?

Will “hybrid” real estate startups cause an “Agency Revival”?

Posted in Commission Reform, Consumer protection, Disrupt Real Estate, Dump Dual Agency, RE2020, Real Estate Consumer Bill of Rights, Real Estate Roundtables, RECALL: Real Estate Consumer Alliance, reVRM, Unbundling the Commission, Uncategorized

#SmartFailing in Real Estate: Rebates, flat fees & fee-for-service over past 20 years


SMART FAILING: Trying to develop a new real estate business model to downsize commissions?  Whether you’re trying to reward DIY homebuyers with rebates, or help FSBOs — for sale by owner properties — avoid the real estate industry’s bloated commission structure, what can you learn from the past 20+ years of efforts to disrupt the real estate industry?

Real Estate Cafe is marking it’s 20th anniversary by seeding a conversation about what real estate will look like in the year 2020.  Our goal isn’t to dwell in the past, but to help develop an informal coalition dedicated to helping real estate consumers save an estimated $30 billion annually by the year 2020.  We call it #RE2020 — and invite you to follow that hashtag on Twitter and other social media.

Why should a new breed of money-saving business models succeed where others have failed?  Let’s begin that conversation by taking a look at a couple of items for the RECafe time capsule:

  • First the photo of what a home page looked like in July 1996 when we hosted a round table at the Real Estate Cafe with Ralph Nader and other leading real estate innovators (more on that later), and
  • Second what industry pundits were saying at the time about the coming downsizing in real estate.

Here’s one of the relics in the Real Estate Cafe’s time capsule — it is a dead document or does it contain secrets about roads not taken, or opportunities that were ahead of their time?  We’ll unfold that theme in coming weeks and months.  Join us by following @RealEstateCafe on Twitter.

The Coming Downsizing in Real Estate: The Implications of Technology

The implications for the real estate industry are potentially enormous. In January, 1995 there were approximately 100 real estate Web sites that offered real estate for sale. By year-end, there were over 4000 real estate related Web sites. Exhibit 6 provides a sample selection of 36 randomly chosen Home Pages and a brief overview of their services offered. While some sites are Home Pages of individual properties for sale, others include offerings of over 500,000 listings across the country. Complete marketing and purchasing information is lacking in the majority of the Web sites, but it is looming on the horizon of this new real estate frontier.

Full report:


Want to participate in our SmartFailing adventure or have some fun with futuristic predictions that missed the mark?  Here are three things you can do:

1.  Scan Smartfailing the vintage future and enjoy the photos.  Got some of your own for real estate, should we co-create a slideshow — maybe for REBarCampSF (August 3, 2015)?

2.  Share resources on Smart Failing, here’s one:

5 Steps for a Better Innovation Culture through Experimentation and Failure

3.  Join a series of events we’re planning online and off in Boston and beyond.  Our recent tweets point to what we’re planning:

4.  Want to collaborate or co-host a local event focused on helping real estate consumers — both DIY homebuyers and FSBOs — save billions of dollars annually?  Join RECALL:  Real Estate Consumer Alliance

Posted in commission rebate, Discount real estate, Disrupt Real Estate, Fee-for-service real estate, FSBO: For Sale By Owner, RE2020, Real estate rebates, RECALL: Real Estate Consumer Alliance, Savings & Rebates, Tech Trends

Will fee-for-service movement launch “Agency Revival” or DOJ/FTC inquiry into real estate?


Yesterday, Inman News — arguably the leading real estate technology news service — launched an impressive report on a new generation of money-saving, disruptive real estate business models.  What they call “hybrid real estate” others, including the former chief economist (shown above) of the National Association of Realtors, have called fee-for-service for two decades.  Is it a idea or movement who’s time has come?

Don’t ask Inman Select’s readers, because they’ve have gone silent — at least for day one.  That caused us to write this comment on their Facebook group:

Just passed midnight on the East Coast and puzzled as to why 5,336 members of this Inman Coast to Coast group have yet to check LIKE or post a single comment? Stunned into silence by survival questions or embarrassing findings like this? 4 out of 10 respondents said they are generally less inclined to cooperate with a hybrid brokerage than a traditional brokerage, and 56 percent said that many agents discriminate against hybrid brokerages.

It’s been 10 years, time for more DOJ / FTC hearings / trainings on anti-competitive business practices?

In the similar comment on this author’s Facebook page, an innovative attorney turned real estate professional wrote:

What’s a hybrid ? Is there a normal way to do RE business ? What is it ?

Here’s my 10 point response:

Good questions (I can see your legal mind at work).  Several thoughts on your question and more:

1.  Lumping a variety of alternative business models into the “Hybrid” catch-phrase is a disservice to consumers, both buyers & sellers, who are searching for money-saving options (real estate rebates, flat fees, etc.)

2.  If hybrid makes any sense, it’s only from the industry’s perspective.

3.  My recollection is that Brad Inman chose the word Hybrid because it wasn’t clear what agency relationship — if any — some of the new business models are offering buyers and sellers using their site.  (There’s some irony in that, see #8 below.)

4.  Asking if there is a “normal way to do real estate” and who should define it goes to the heart of the anti-competitive practice Inman’s survey has revealed.  (Hope someone from DOJ or FTC is reading the report!)

5.  The question also exposes some of the issues NOT addressed in the report, like why is the trillion dollar real estate industry still operating on an obsolete-two sided real estate commission that is set by the seller’s agent?

6.  If you turn the clock back 10 years, one of the government interventions considered at that time was uncoupling or divorcing real estate commissions, so buyer and sellers can negotiate their own fees.  Is it time to revive that conversation or let start-ups like and veterans (no pun intended, see footnote) of fee-for-service continue to hack away at the dominant model as we have for the past 15 – 20 years?

7.  As some hybrid real estate models offer non-agency level services, will that cause an “Agency Revival” led by traditional real estate agents who want to justify their fees?  As we blogged before the release of the Inman report, we’d welcome that unintended consequence and use it to expose / repeal Designated Agency in Massachusetts!

8.  Ironically, conflicts of interest are already widespread in real estate because of the hypocrisy of Designated Agency.  Won’t forming teams — one of the responses recommended by the report to compete more effectively with #HybridRE and the last paragraph of the report — will only cause more conflicts and insider trading?

9.  No where in the report is there a hint that rebates offered by the featured companies are trivial by comparison to REAL savings REAL buyer agents can offer buyers.  That will become increasingly clear as the housing market changes, and we’ll write more about that on an ongoing basis.

10.  If you’re a real estate professional, what’s your take?  If you’re a consumer, want us to help you explore money-saving options to meet your needs as a DIY homebuyer or seller?

* FOOTNOTE:  SoloPro’s Founder has a formal military background, whereas long-time fee-for-service professionals like the Real Estate Cafe have been using guerrilla tactics on the ground and in cyberspace for decades.

Posted in Commission Reform, Consumer protection, Discount real estate, Disrupt Real Estate, Dump Dual Agency, Fee-for-service real estate, Hybrid real estate, Investigative Reporting, Real estate rebates, Unbundling the Commission

@POTUS > Crack down on Conflicts of Interest in real estate, too?


Before the week ends, Inman News will publish their 10,000 word report on the rise and potential impact of new “hybrid real estate” sites on the bloated real estate commission model in the US.  From the perspective of a longtime real estate consumer advocate, it’s ironic that the same industry that pushed legislation to abrogate the Common Law of Agency through statehouses from approximately 1993 to 2005 is now using fiduciary services to justify their conflicted but allegedly full-service, full-commission business models.

Meanwhile, there seems to be a growing awareness of the importance of fiduciary duties elsewhere in the economy.  This Spring, Consumer Federation of America and a coalition of consumer groups — including AARP’s 40 million member organization — promoted an impressive campaign.  The call for financial advisors to remove conflicts of interest was actively supported by the White House and the charismatic Secretary of Labor, Tom Perez who spoke yesterday at the White House Conference on Aging as did President Obama.

That gave critics of Designated Agency a high profile opportunity to link our campaign against conflicts of interest in real estate to a broader agenda. Anyone who would like to support that call can retweet or share this tiny URL to the President and US Department of Labor: (please share link on social media)

Finally, it’s outside my expertise but there is also a growing awareness of the impact of investment on the sustainability of the planet.  To my surprise and delight, the word “fiduciary” appeared 27 times in this 20 page call for new paradigm called “Sustainable Capitalism.”  (please share link on social media)

Would love to get feedback from agency law experts like attorney / former regulator Maureen Glasheen and founder Doug Miller on both the call to expand the traditional interpretation of agency duties and section on Break of Fiduciary duties included in the report above.  Anyone else want to comment or participate in campaign to repeal or neuter Designated Agency laws?  July 25, 2015 marks the 9th anniversary of Congress Hearings on anti-competitive business practices in real estate:  (please share link on social media)

That’s 11 days from now… should fellow real estate consumer advocates look at what Inman publishes Thursday and decide how to use that occasion this July and again this Fall — the 10th anniversary of the FTC / DOJ hearings that preceded Congressional hearings?

Posted in Buyer agent, Commission Reform, Consumer protection, Defensive Homebuying, Designated Agency, Disrupt Real Estate, Fee-for-service real estate, Real Estate Consumer Bill of Rights, RECALL: Real Estate Consumer Alliance, Savings & Rebates

Will Pope’s encyclical expand Housing Justice Movement?


Homeownership rates are falling in Massachusetts and across the nation, and housing is back in newspaper headlines and nationally syndicated talk shows.  Here’s one perspective, that knowingly or unknowingly, points to the Pope’s encyclical on the environment and the prospect of a grassroots movement for housing justice:

Greedy spec builders want the most bang for their buck so the put oversized houses on undersized lots and then cannot sell them. A more modest house would have moved. There are only so many Mr. and Mrs. One Per Cents.

There are only so many 1%’ers if there is no external demand / pressure on local housing markets from global real estate investors. An annual update just released by Harvard’s Joint Center for Housing Studies lists rising home prices as one of the culprits for the homeownership decline, but the words “investor” and “speculators” do not appear in the Boston Globe’s coverage of the document. Contrast that coverage in the New Yorker and inventory snapshots from the former People’s Republic of Cambridge and it’s neighbor, DelusionVille (formerly Somerville):

Cambridge MLS inventory snapshot 6/16/15:
26 listings last year priced $900K+, now 42 or 49% – up from 28% in one year – Unsustainable? #AffordableHousing

Somerville MLS inventory snapshot 6/23/15:
Active single-family listings in Somerville have DOUBLED compared to 2014, 7 of 9 price over $800K remain unsold

Excerpt from New Yorker article, Real Estate Goes Global:
“The challenge for Vancouver and cities like it is that foreign investment isn’t an unalloyed good. It’s great for existing homeowners, who see the value of their homes rise, and for the city’s tax revenues. But it also makes owning a home IMPOSSIBLE (emphasis added) for much of the city’s population.”

Would be homeowners who have been priced out of the market should pay attention to what’s happening in other cites where ordinary citizens are beginning to push back against real estate speculators: SF, Toronto, and Vancouver are setting the pace, see images from #DontHave1Million campaign:

Writing in Boston, one angry reader blurted out, “Since when is home ownership a right?”  His question is a good one, one that has not escaped the Pope’s new encyclical on the environment and the Catholic teaching on the social mortgage, the debt we owe each other as members a just society:

94. The rich and the poor have equal dignity, for “the Lord is the maker of them all” (Prov 22:2). …This has practical consequences, such as those pointed out by the bishops of Paraguay: “Every campesino (definition = peasant farmer) has a natural right to possess a reasonable allotment of land where he can establish his home, work for subsistence of his family and a secure life. This right must be guaranteed so that its exercise is not illusory but real. That means that apart from the ownership of property, rural people must have access to means of technical education, credit, insurance, and markets”.

Contrast that ideal to the reality of what’s happening in housing markets across the country, homeownership is down to the lowest levels in two decades, and “Every Single County in America Is Facing an Affordable Housing Crisis.”

With 4 out of 5 New Big City Rental Buildings targeting the rich, is it any wonder that just yesterday, a Huffington Post article asked, Is It Time for a Housing Justice Movement?

EXCERT: So the question arises, can the housing justice movement that is taking off in Seattle spread across the nation?

My hope is that the Pope’s encyclical will help expedite that movement and lead to a tangible reordering of priorities and policies to address the gross inequities in too many housing markets in the US and around the globe:

93. Whether believers or not, we are agreed today that the earth is essentially a shared inheritance, whose fruits are meant to benefit everyone. …“the Church does indeed defend the legitimate right to private property, but she also teaches no less clearly that there is always a SOCIAL MORTGAGE (emphasis added) on all private property, in order that goods may serve the general purpose that God gave them”. Consequently, he maintained, “it is not in accord with God’s plan that this gift be used in such a way that its benefits favour only a few”.

95. The natural environment is a collective good, the patrimony of all humanity and the responsibility of everyone. If we make something our own, it is only to administer it for the good of all.

Full encyclical text:

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