It’s MLKing weekend, and that always challenges me to think about economic and social justice. As a consumer advocate / buyer agent, our analysis of recent bidding wars in Cambridge leads me to ask whether the city might become a lab / test market for new consumer-centric business models enabled by VRM and Personal Clouds? At a minimum, in an internet age of transparency, shouldn’t homebuyers be able to verify whether competing bidders really exist or whether they are raising bids against themselves when this is happening:
- During 4Q2013, 60% of MLS listings sold for over their asking price in Cambridge, up tenfold since 4Q2010;
- One in five homes sold for $50K or more over asking price; and
- One in thirteen sold $100K or more over asking price!
- In total, 115 homebuyers paid $7.8 million dollars over asking price, or $1.1M more than the four previous years combined.
So hope stakeholders, particularly those driven by MLKing’s vision of a more just society, are interested in looking beyond direct costs to individual households involved in BLIND Bidding Wars, to indirect social costs, risks, and casualties, including own adult children, who also want to raise their families in Cambridge.
Do the statistics above point to a New Gilded Era in the former People’s Republic? What’s the best way to address that question? To start, would any homebuyers, researchers at Harvard or MIT, open data activists, or smart city app builders like a closer look at patterns behind sales $50K or more over asking price shown above?
With Cambridge MLS inventory down by two-thirds, my dream scenario is that the unprecedented disconnect between runaway bidding wars and known inventory will inspire two responses:
1. Harvard Law School, the attorney general’s office and consumer advocates will look at the Agency Law / Consumer Protection issues, including legislation passed without public debate nearly a decade ago to paper over conflicts of interest in real estate with Designated Agency; while
2. Innovators at MIT’s Media Lab, Harvard iLab, and the start-up community will explore ways to create an open, real estate eco-system that insures transparency and equal access to housing opportunities while minimizing costs and games real estate agents play.
If anyone wants to honor MLK this weekend by talking on or offline about next steps, please contact Real Estate Cafe!