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Entries from November 2006

Back from the dead…courtesy of Altos Research

November 30th, 2006 · 12 Comments

Though temporarily put out of commission by a mild form of the Martian Death Flu that recently afflicted Kris Berg — and perhaps an overdose of Thanksgiving Tryptophan, not to mention a stronger-than-expected Q4 — I came to life upon seeing Mike Simonsen’s insightful post on the relationship between Palo Alto home prices and the NASDAQ.

I thought I’d take myself up my own challenge (posted on Mike’s blog) of seeing how well that pattern fits going further back. The result? Broad-stroke parallels useful for thinking about large trends, but (alas) no neat regression-based formula that would help you to predict, say, next month’s median prices. (Of course, if I had found something like that, trust me, I would not be posting it on my blog! I’d run as fast as my legs could carry me over to Sand Hill Road and hit up some VC’s for a few billion dollars to buy and sell Palo Alto real estate!)

Here’s the chart comparing Palo Alto median home prices with the NASDAQ; both numbers are indexed to 100 = February 1997.

The key observation seems to be that, very roughly speaking, NASDAQ’s movements are followed several months later by corresponding movements of about half the magnitude in Palo Alto prices. In other words, when the NASDAQ starts trending upwards, Palo Alto prices start doing the same a few months later. If the NASDAQ’s climb ends 50% higher, Palo Alto’s ends about 25% higher. Observe: (Numbers refer to chart below.)

  • 1 to 2 The NASDAQ , as we’ll all recall, had a glorious run, peaking in February 2000 at a level more than triple its February 1997 level; Palo Alto prices also had a glorious run during that time, though the peak took place a few months later and was “only” 2.5X higher than in February 1997.
  • 2 to 3 The NASDAQ’s initial plunge from February 2000 to May 2000 shaved roughly 30% off its value; in response, Palo Alto prices dipped 13% from June to September 2000.
  • 3 to 4 The NASDAQ’s brief rally from May to August 2000 was followed by a brief home price rally from September to December of the same year.
  • 4 to 5 Following its brief rally, the NASDAQ went into free-fall from August 2000 through September 2001, during which it lost over 60%. Palo Alto’s corresponding price drop started a good 6 months later and ended in December 2001 30% lower.
  • 5 to 6 The NASDAQ had another brief rally through November 2001; Palo Alto waited till December and climbed for a good half year.
  • 6 to 7 Unable to sustain itself, the NASDAQ dropped 40% from January to September of 2002; Palo Alto prices fell 18% from July 2002 through January 2003.
  • 7 to 8 With a few brief interruptions, the NASDAQ has been marching slowly upward from September 2002 through now, slightly more than doubling during that time. From February 2003 through now, Palo Alto prices have climbed by about 50%.


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Tags: For buyers · For sellers · Palo Alto · Real estate · Real estate data

Real estate office in a box (Part 2)

November 20th, 2006 · 2 Comments

photosynth.jpgHere’s another really slick piece of Web 2.0 software that may soon be a part of every tech-minded listing agent’s arsenal:  Microsoft’s Photosynth product, still very much in Beta.

What is it?  It’s sort of a souped up virtual tour, on steroids.  It stitches together hundreds of photos of a certain setting into a very believable 3-dimensional world in which you can zoom in and out, walk around, pan around…in short, get as close to being there without actually…being there.

I’d love to test it out personally, but currently there are two obstacles for me:
1) It’s not yet open for the public to play with; for right now the site only has canned demos.

2) It requires IE7 to operate, and I make it a policy to not be an early adopter of Microsoft browser products…plus QuickBooks 2005 doesn’t like it.

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Tags: Microsoft · Photosynth · Real estate · Technology

The carnival is up…

November 20th, 2006 · 1 Comment

The good folks at Ubertor took the helm at the Carnival of Real Estate this week, wading through a ton of good entries to narrow it down to 11.  Pat Kitano of TransparentRE rightfully won top honors for his entry on first mover advantage in a Web 2.0 world, a much-discussed and dissected article (see the comments) on how difficult it is to stay ahead of the game technologically these days.

In addition to thinking kindly of a recent post of mine, (my second in a series on why the Internet will never displace realtors)  Ubertor also highlighted the following:

  • Searchlight Crusade on “Buyers Who Don’t Want a Buyer’s Agent.“  Dan makes the good point that a lot of unattached buyers who meet agents at an open house get a poor impression of agents in general simply because they (the buyers) don’t understand that the listing agent not only isn’t on their side, but actually has a legal obligation to do everything short of lying, concealing the truth, or misleading in order to get the the most amount of money in the least amount of time for his client — the seller.  So, yes, if you’re at an open house, and you feel the listing agent is putting pressure on you…that’s their job!  They’re not there for your benefit…
  • Douglas Heddings at True Gothan discusses the luxury market.  Psst, Doug…if your clients can’t find the $15M property they’re looking for…send them my way!  It’ll be a long commute, but a hell of a property!  Though Doug makes no mention of it, my understanding of the Manhattan luxury market is that it’s heavily affected by Wall Street bonuses, which apparently are going to be pretty good this year.
  • Joel Burslem at FutureOfRealEstateMarketing talks about Quantcast, a new — and free! — web traffic analysis service.  Using Quantcast, Joel notes that Trulia’s site has a stickiness problem, while Redfin’s visitors are pretty wealth — which makes sense, considering their current activities are confined to the wealthy West Coast enclaves of Seattle and the Bay Area.
  • Jonathan Dalton muses about some of the bone-headed decisions NAR has made regarding the Internet.  Preach it, brother!
  • Zillow’s general counsel Liam Lavery comments on a recent court decision exonerating Craigslist in a lawsuit that claimed the site was violating the Fair Housing Act.  Perennial Web rivals Yahoo and Google chimed in on the case in support of Craigslist, and Liam notes that this decision bodes well for both purveyors and consumers of online real estate.
  • The Tour Sheet, written by Kyle Else, notes that caveat emptor remains the best consumer anti-scam protection, and then he goes on to list what some of the more common scams are.
  • Chiming in from Utah, Greg Tracy asks “What if Zillow Got Serious?“  He proposes — hypothetically — that Zillow might benefit from hiring scads of on-the-ground folks to keep their data up-to-date and accurate.  My take?  I think we’re all missing the forest of Zillow’s future plans for the trees of its current AVM offering.  Zillow has made it clear they have no intention of being a one-hit wonder, and though what their next offering will be and when it will come out is anybody’s guess, I would put money on it being as compelling to the general public, and controversial to the industry, as their Zestimates.
  • The RealEstateTomato’s headline is one that brings shivers to grammatical purists, but, ending in a preposition or not, Jim Cronin’s question (re-phrased) is valid:  For Whom are You Blogging?  Our corner of the blogosphere sometimes resembles an echo chamber, but Jim suggests that some first time home buyers and sellers might be finding our sites too.
  • We all have our favorite clients, and the Bloodhound takes us on a long, delightful journey with some of his, the Pawlenko’s.  The best example I’ve seen in a long time about the whole “real estate is a relationship” thing.
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Tags: Carnival of real estate · Liam Lavery · National Association of Realtors · Real estate · Redfin · Trulia · Zillow

Real estate office in a box

November 19th, 2006 · 1 Comment

Inspired by Pat Kitano’s recent post on Google Apps, which in turn was inspired by Loren Nason’s musings on real estate technology, I thought I would chime in on the discussion about cool tech tools.


Traditionally, one of the benefits of working for a large brokerage like Alain Pinel (my broker) was the technology infrastructure they provided — email service, fax machines, web sites, photocopiers, a PABX, desktop computers, servers, perhaps even cell phones — and discounts for third party services like graphics design, mailer printing, and office supplies. These days, however, even a one-person shop has much of this functionality at his fingertips…for a fraction of the “desk fees” charged by many of the brokerages.

desktop-computer.jpg fax-machine.jpgoffice-supplies.jpgtelephone.jpgphotocopier.jpg

Let’s look at how a small brokerage might tackle its technology needs in three categories: communication, marketing, and administration.
We start with a computer, which will end up being your primary tool in all three categories. Some folks prefer a desktop for their main office and a laptop on the road, but I prefer having only a laptop. Be sure you get one with a good-feeling keyboard, and you might want to spring for a large monitor to plug the laptop into when you’re at your office. You may also want to invest in a high-speed Internet access service for your laptop, such as that offered by Verizon.

  • Phone — Get a VOIP (Voice Over IP) phone service from a company like Vonage or Skype, and give out that number. When you’re in your office (which for a small company could be at home), use that as your primary phone. Configure it so that if you don’t pick it up in 3 rings, it forwards to your cell phone. Get a cell phone with a generous plan and possibly with high-speed Internet access, depending on whether you’ll also get high-speed service for your laptop.
  • Internet access — If you work from home and already have high-speed Internet access, set up an (encrypted) wireless router so you can work on your laptop from anywhere. If you have a dedicated office, you may have to spring for an Internet connection plan — especially if there are several people in the office. If you’re literally a one-person shop, you might get away with having only the high-speed Internet connection on your laptop.
  • Fax machine — Skip it and save some serious bank. Get a $9.95/month Internet fax service plan which enables others to send you a fax to a dedicated number and forwards that fax as an attachment in your email, and be sure it also has an outgoing email-to-fax service. That way, you can send and receive faxes from anywhere you have Internet access. Two options to check out are Onebox and Greenfax.
  • Email — Lots of folks use an Exchange hosted solution; some are beginning to migrate to Google Apps for Your Domain, though there’s some privacy concerns re. the latter. Loren Nason has a good explanation about setting up Google Apps. Your web site provider may well have an email service as well.


  • Web site — If you prefer a low-hassle solution, and you’re not terribly interested in getting involved in the nuts and bolts of it, you’ll probably want to stick with one of the many, many real estate web site solutions. If you feel like getting your hands dirty, you may want a hosted solution that gives you complete control. I use Bluehost, which for less than $10/month gives me several domain names, a ton of free apps, and pretty good performance.
  • Fliers/brochures/postcards — If you’re reasonably handy with Powerpoint or Publisher, you can design most of what you need yourself. Alternatively, you could hire a graphics artist to come up with a couple of neat templates for you, and then edit for each use accordingly. If you’re well-organized, you can save a lot of money by getting your mailings and open house fliers ready a week in advance, since you can use one of the Internet printing services like VistaPrint or OvernightPrints, which gives you good quality on full-color double-sided 4X6 postcards for something ridiculous like 15 cents each. Some of the services will even bulk mail them for you — but that adds up pretty quickly at 20 cents a card. If you’re not as well organized, you can probably get them done overnight at a local Kinko’s FedExKinko’s.


  • Printer — I personally wouldn’t recommend investing in an expensive, high-end printer. What’s often more cost-effective — again if you’re well-organized — is to get a $300 color printer that you use when you need, say, 10 copies or less. For more than that, and especially if you’re printing out 10 copies of a 100 page listing disclosure, you might want to check out FedExKinko’s online print service.
  • Photocopier — Again, give it a miss and save some money, or get a cheap one (preferably the same gizmo as your printer) for doing 10 copies or less.
  • Scanner — This is something still not found in most of the traditional brokerages, but I highly recommend it for any small business. I’d get one that’s reasonably fast — say, 15 pages per minute — and it becomes your defacto photocopier and fax machine. Say you get one of those annoying old-fashioned paper (shudder!) 100-page disclosure packets from a listing agent. Scan it in and forward it to your clients by email — they’ll have a much crisper copy and be duly impressed with your tech skills.
  • Signature service — Ditch the old routine of print, fax to client, wait for fax to come back, etc. Try one of the electronic signature packages — provided, of course, that electronic signatures are legal for real estate transactions in your state — and you’ll wonder how you ever lived without it. I use Docusign, but I’ve heard good things about Suredocs as well.
  • Backup — If your whole business is on your laptop, you need to protect that data. I use Carbonite, a neat online service which backs up whatever you want it to for something like $5/month. Whenever you have an Internet connection, it scans your laptop for new or changed files and then quietly uploads them to Carbonite’s servers in the background. (Actually, I believe Carbonite uses Amazon’s S3 data service.)
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Tags: Alain Pinel Realtors · Brokerages · Docusign · Real estate · Suredocs · Technology

Why the Internet will never disintermediate Realtors — Part 2: It builds, not erodes, the relationship

November 18th, 2006 · 14 Comments

In my previous post on Internet disintermediation, I argued that real estate is primarily a relationship business, and that the only real estate professionals who should fear the Internet are those who really, really suck at the whole client relationship thing.  For the rest of us, the Internet represents a big challenge, yes, but also a huge opportunity.

The Internet, in fact, is arguably the best relationship-building tool to enter the business in a long time, far better than carting pumpkins around at Thanksgiving, sending out fridge magnets, plastering our high school prom mugshots on shopping carts, or buying full-color ads in the local paper.  The only better relationship-building tools I can think of than the Internet are the really personal, high-touch ones, such as taking clients out for a meal, calling them on the phone, or sending them birthday cards.

thumbwagon.jpg calendar.jpgshopping-cart.jpg

The Internet excels as a relationship-building tool for at least four reasons, which — tadah! — all begin with the letter “T”!

  1. Target
  2. Tracking
  3. Tweaking
  4. Timing

The main purpose of much of our advertising efforts in this industry is to lay the groundwork for potential client relationships.  We want our prospective customers to see us in different contexts, to get to know us, to recognize our names and faces.  When they drop by our open house, we want them to say, “Oh!  You’re the dude that mails those helpful cards!” or, “Hey — I thought I recognized you.  Aren’t you the Realtor that’s always advertising in the paper?”  If we can establish at least an ephemeral relationship, we stand a better chance of getting the business.  Consistent advertising in numerous settings increases our brand awareness.

And that’s precisely why the Internet is such a great tool.  Let’s look at the three points above.

  1. Target:  Advertising in the local newspaper reaches primarily a local audience — and that’s a good thing, because real estate is primarily a local business.  But there are prospective clients out there who happen not to get or read the local paper.  Perhaps they live across the country and are planning on moving.  They’re not going to find you in the local paper, but they may well do so on the Internet.  And if they do find you on the Internet, it’s often because they were specifically looking for real estate content.  My logs show that though there are occasional visitors who randomly stumble on my site (such as a recent one who was searching on MSN for “how to balance your checkbook powerpoint“), most of them come by to learn more about real estate, for example “Alan Dalton Zillow NAR” and “November 2006 real estate market values Silicon Valley.”  My presence on the Internet simultaneously reaches a broader, and yet a more focussed audience.
  2. Tracking:  Quick!  Tell me how many people read your ad in last Sunday’s paper!  How long did they look at it?  30 seconds? 2 seconds?  Was there a part of the ad that attracted their attention more than another?  In the offline world, we have only very rough estimates of these metrics, like the circulation figures of the paper in which you advertised.  With the right tools, on the Internet you can slice and dice your audience’s interest nearly any way you like.  You’re getting a lot of readership for the articles you write on current market conditions?  Keep cranking them out! Nobody’s reading your regular recipe contributions?  Ditch ‘em!
  3. Tweaking:  Do people respond better to an ad which describes your listing as, “Magnificent” or “Splendid?”  Do they seem to prefer from-the-street photos, or inside ones?  Even if you could easily get this information in the offline world, it would take you at least one advertising cycle to tweak the message accordingly.  Online, once you get audience feedback, you can change your message in minutes.
  4. Timing:  Once your ad has run in the local paper, that’s it!  You’re not going to get much more exposure from that particular run.  That’s probably a big reason for the enduring popularity of real estate advertising gimmicks like putting pictures on buses and sending out fridge magnets:  these tools have a longer shelf life than newspaper advertising.  The same is true on the Internet:  unless you get sandboxed, search engines archive your content long after you’ve forgotten about it.  An article you wrote 18 months ago might pop up as a top entry on somebody’s Google search today.

So there ya have it…the Internet is our friend, not our enemy.  Far from cutting us out of the action, the Internet enables us to become better at building the relationships that are so critical to becoming successful.

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Tags: Disintermediation · Real estate

Escaping from tab hell (aka “Google’s taking over my desktop!”)

November 18th, 2006 · No Comments

I’m constantly coming across nifty blog-worthy items on the Internet.  Typically I keep track of them by leaving them in an active Firefox tab:

That works fine up until about a dozen…but then what?

Enter a new product from Google:  the notebook.  You install a little widget, and voila!  A new option appears on your right-click menu:  Note this (Google Notebook).  From there, you can drag topics where they belong, comment on them, delete them.

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Tags: Blogging · Google · Real estate

Realbird flies high

November 18th, 2006 · 3 Comments

A few days ago, I had the pleasure of meeting the good folks at Realbird, the company that provides my MLS search solution.  They’re veterans of the real estate technology space, and it shows.  Their current offering is a neat, simple, no-frills Web 2.0 map-based MLS search, and they’ve put a lot of thought into the user interface and experience.

We were talking about how technology has changed dramatically in the last few years.  If they had tried to create something like Realbird in, say, 2003, they may well have needed five times more programmers, triple the time, and who knows how much more funding.  The downside of the greater ease of developing cool real estate applications these days, however, is that you have even more pressure to innovate, innovate, innovate, and to do so quickly because whatever edge you have can erode in a few short months.

And speaking of innovation, these guys have some really, really neat ideas they’ll be rolling out, ideas that will continue to change the way that real estate professionals and consumers interact with each other and with real estate itself.



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Tags: Real estate

Friday fun: Scarabaeidae Scarabaeinae

November 17th, 2006 · 1 Comment

Consumer warning: This has absolutely nothing to do with real estate!

Last December my wife and I took a one-month holiday in southern Africa. One of the highlights was a several day stay in Mokolodi Game Reserve near Gaborone, Botswana where we were entertained by several viewings of Scarabaeidae Scarabaeinae, more commonly known as “Dung Beetles.”

These remarkable scatalogically-obsessed creatures — sort of the Borats of the insect world — are about 2-3 inches long and expend an enormous amount of energy furiously and determinedly rolling up, uh, dung into balls the size of a lemon and pushing these balls — backwards! — to their nests. Nothing can stand in their way, not pools of water, not rocks many times their size, not curious camera-toting tourists.

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Tags: Dung beetles

This week’s carnival is live

November 13th, 2006 · 1 Comment

Head on over to True Gotham to check out this week’s Carnival of Real Estate.  I’m honored that my contribution on the Internet and Realtor Disintermediation was listed.  Thanks!

Lots of juicy content to sink into on this Monday…

  • BlueRoof talks about co-opetition in this business, where agents often compete with each other for a listing, but regardless of who gets it, they must cooperate on getting that listing sold.
  • Mike “Gatecrasher” Simonsen of Altos Research checks out the O’Reilly Media conference and notes that real estate advertising in the online and offline world are very similar:  in both media, there are ways promote yourself that a) take a lot of time and little money — “sphere of influence” offline and blogging online –and b) take a lot of money but not much time — “newspaper ads” offline and “pay-per-click” online.
  • Daniel Rothamel at The Real Estate Zebra continues with his analogies between being a referee and an agent.  His goal in transactions is to handle everything smoothly. A well-handled transaction that goes smoothly for all parties involved is something that may not garner a whole lot of talk, but it is always noticed and remembered.

The other entries are also definitely worth checking out; I haven’t had time to thoroughly digest them yet, but when I do, I’ll make some comments.

True Gotham, thanks for all the hard work!


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Tags: Real estate

Today’s sign that the apocalypse is nigh (Part 2)

November 10th, 2006 · 2 Comments

Redfin and the Hound on agreement in something? 


Both mavericks, and both advocates of transparency (when it comes to buyers’ commissions), but strong disagreements on transparency to buyers about what the real job of the listing agent is.

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Tags: Real estate · Redfin · Transparency