June 7, 2008
Long-time Mortgage Mania readers, (aka Mortgage Maniacs) know that I’m an avid reader of the New York Times, so it should come as no surprise that I would have some comments on this article in the Friday June 6 edition regarding the continuing foreclosure crisis affecting consumers across the country.
Authors Bajaj and Grynbaum review some recent statistics on foreclosures, and then go on to predict another wave of foreclosures as the economy continues to slow and more consumers fall victim to layoffs and job cuts.
It’s easy to ignore these rumblings here in wealthy Silicon Valley where the local economy is still vibrant, even with nearly $5 a gallon gas, as it is still a minor impact on a budget with a $5,000 a month mortgage. It’s easy for us living in The Bubble of Unstoppable Real Estate (which I define as: Palo Alto, Menlo Park, and Los Altos, your mileage may vary) to say “it can’t happen here”.
Not so fast there pardner. A Short Sale in Atherton you say? It’s almost enough to make you drop your Grey Poupon.
This little number at 199 Selby Lane in Atherton recently listed by Lanny Dannenberg of Keller Williams is a short sale at $1,795,000. It has been on the market with a couple of different brokers for over two years, starting at $2,495,000 in March of 2006.
The good news is that the local market continues to be pretty strong, especially at the upper levels, above $3 million. Don’t take my word for it, check out this market data for the latest facts and figures on Palo Alto and surrounding communities.
Thanks for reading . . .
Tags: 4---mortgage-mania, Atherton, economy, foreclosure, new york times, short sales
How Come Redfin’s P&L Looks Distinctly Unlike That Of A Traditional Real Estate Brokerage? Because Redfin Is Actually A Brokerage, Not A Landlord!
October 1, 2007
Tipped off by another insightful Greg Swann piece (Greg — do you ever sleep?) I just read through Glenn Kelman’s fascinating soul-baring finances-revealing post over on Guy Kawasaki’s blog. As a serial entrepreneur — and quite a successful one at that — Glenn has certainly done more than his fair share of financial modeling, and his post is rich in advice for the prospective entrepreneur.
What is particularly fascinating is how Redfin’s financial modeling is thoroughly and utterly unlike that of a traditional broker. That makes sense, of course, since Redfin is, well, not a traditional broker. In particular, unlike traditional brokers, Redfin makes its money through the act of – wait for it — brokerage — that is, representing buyers and sellers of homes.
Traditional brokerages — Coldwell Banker, Prudential, ReMax, Keller Williams, Alain Pinel — on the other hand, most emphatically do not make money through brokerage activities — they leave that work to their agent work force, usually a collection of independent contractors. Traditional brokerages, you see, make their money through landlording.
They provide agents with office space, training, mentoring, branding, open house opportunities, telephone lines, etc. and then charge these agents twofold: first, a portion of their commissions (starting at 50% or more for new agents, going down to perhaps 5% or 10% for the top agents, averaging perhaps around 25%) and secondly, a rather long laundry list of fees, including tech fees, desk fees, legal fees, and a myriad of others.
Much of what remains in the agent’s pocket after the broker’s share is divvied up among countless vendors, including the local MLS, newspapers, cell phone carriers, web site vendors, and Lexus dealers.
Here’s a picture of the money trail:
…and here’s one of them new-fangled Sketchcasts…
Further commentary from others:
- Ardell summarizes her take on the article: Sounds like the practical people are the ones asking for money, and the impractical ones are the people giving the money.
- Joel wonders if the downturn in the market will do a Foxton’s to Redfin.
Tags: Alain Pinel, Coldwell Banker, Glenn Kelman, Industry, Keller Williams, Redfin, ReMax
September 25, 2007
Trulia, the online listing site which aggregates data from brokers and agents around the country, just turned two today. In that short time, they’ve accomplished some fairly impressive feats:
- They built a home search site, getting listings Realtor-by-Realtor, broker-by-broker, without going through MLS’s.
- They formed partnerships with a number of leading regional and nation-wide brokerages, including Alain Pinel, Coldwell Banker, and Keller Williams.
- They layered on an impressive array of quantitative data on schools, neighborhoods, price trends, and so forth.
- They mixed in qualitative information with their Voices product, which has spawned quite an active consumer-agent forum.
- They became one of the leading sources of online traffic for many of their broker partners.
As founder Pete Flint notes in this blog post, they did all this without resorting to the all-too-common bait-’n-switch tactics in this industry.
Tags: Alain Pinel, Coldwell Banker, Industry, Keller Williams, Trulia
May 18, 2007
This post is in honor of the citizen journalists at Redfin, whose months of efforts at writing witty, insightful property reviews were brought down by an over-zealous MLS association bent on maintaining the rightful balance of power in the real estate business — ie, that the listing agent is at the top of the pyramid, the buyer’s representative is significantly lower, and the consumers…well, they’re not really that important, let’s face it.
I’m a good 800 miles out of the jurisdiction of the NWMLS, but I’m sure our local MLS’s are paying close attention. So, here’s what my semi-regular property reviews would look like if they were to be NWMLS-compliant…
Ken DeLeon, Wilson Sonsini attorney turned Keller Williams mega-agent, has a new listing at 994 Loma Verde. Like half of today’s tour, it’s priced just a whisker under $1.3M, but good common market sense would suggest it’ll go somewhat above that. At ~1800 sq ft, it’s spacious and bright, and — as we would expect — it’s impeccably staged. Another met expectation was Ken’s food line up — he always does a full-court press to bring in the agents, and we were there in force. Ken’s open house schedule for this weekend is standard for him: 1pm to 5pm on both Saturday and Sunday. That is, while other agents are still enjoying lunch, Ken is already out there at the property; while other agents have long gone home, Ken is still there, trying to get the best deal for his client.
(Full disclosure: Just so there’s no mistake, I am not Ken DeLeon. My name is Kevin Boer. Ken is a friend, and, technically, a competitor. I’m with Alain Pinel Realtors, not Keller Williams. 994 Loma Verde is not my listing. I am not advertising the listing. I am not pretending as if I am the listing agent in an effort to get people to call me about this property. I am talking about the property because I saw it on tour today and it was pretty neat.)
Tags: Alain Pinel Realtors, Industry, Keller Williams, Ken DeLeon, Real estate
March 13, 2007
Alas, the Americans with Disabilities Act does not consider gluten-intolerance a protected condition, and thus I went hungry during today’s Menlo Park real estate tour, in which many homes offered tempting delicacies to lure us in.
Though the dearth of housing inventory remains an issue (see the 90-day rolling average chart to the left), the numbers have been increasing lately (per the 7-day rolling average chart on the right), and this was reflected in today’s tour which featured a surprising number of properties in the Willows.
But before stopping by the Willows I went to the Flood Park neighborhood sandwiched between Bay Rd and Highway 101 to see Corey Sijbrant’s listing at 1033 Ringwood, Menlo Park. Weighing in at $1,049,000, with 3 bedrooms, 2 bathrooms, and 1600 square feet, it’s been nicely done up and the master bedroom boasts a loft area, a touch I’ve always liked.
Moving on to the Willows, I started at 927 Arnold, a Tasha Standridge (Keller Williams) listing. This home is a classic “Timing is everything story.” On the market during last year’s doldrums, it just didn’t sell. Tasha wisely took it off the market, made some improvements, and now it shows even better than before and will doubtless sell within the week. With two stories, 4 bedrooms, 2 bathrooms, and about 1750 sq ft, this home is listed for only $990,000. A home that large in the Willows for under a million dollars? What gives? Simple — it’s unfortunately only a stone’s throw from Willow Rd and from highway 101. The sound barrier wall deflects a lot of the noise, but there’s still enough noise to make the property’s yard a poor choice for a yoga meditation session. Check it out this weekend during the Saturday and Sunday open house.
Next was this week’s winner of the “great spread” award: 212 Chester St from mother-and-daughter team Gloria and Caitlin Darke (Alain Pinel). I had to content myself with the healthy stuff there — celery sticks and carrots — and pass on the undoubtedly delicious, but tragically gluten-ridden, breaded chicken. Oh yes, the home itself…Priced at a whisker under $1.3M, the home has been significantly redone, boasts a large lot over 7300 sq ft, and has nearly 2000 sq ft of living space. See it for yourself during this weekend’s open house on both Saturday and Sunday.
Next up was Karen Izzo’s (Coldwell Banker) listing at 3 Cleland Place. Also open this Saturday and Sunday, this $1,200,000 “Charming Willows Bungalow” has a surprisingly large back yard — complete with a nostalgia-inducing tree swing — and 1410 square feet of living space, including 3 bedrooms and 1.5 bathrooms. Her Realtor treats included some much-needed coffee and some undoubtedly also delicious, but sadly be-glutenized muffins. I had to pass.
From there the next on my list was local Keller Williams superstar Miles McCormick’s listing at 336 Concord Drive. Miles was in the business and web-savvy early enough that he snagged the domain name “HomesOfThePeninsula.com”. At $786/sq ft, this 1520 square foot property will set you back just under $1.2M, and you’ll get not only a spectacular Willows location — with proximity to downtown Palo Alto — but also a very nicely done up 3 bedroom, 2 bath home. Again, delicious treats. Again, not for the gluten-intolerant Realtor. Oh yes, this home is also open on both Saturday and Sunday.
Tags: Alain Pinel Realtors, Coldwell Banker, Consumer, Flood Park, Home reviews, Keller Williams, Local information, Menlo Park, Miles McCormick, Open houses, Real estate, Willows