Mike's Market Musings

What do you expect from your Broker?

2010-02-26T11:57:00.000-08:00

Many practitioners within the real estate industry, Brokers and Sales Associates, are asking the question today, "What is it I want from my Broker?" Ten years ago the answer would have certainly revolved around office facilities, equipment, training, and advertising. Today, I suspect the answer is a bit different. Give the advances in tele-communication many more agents are working remotely from the traditional office at fully equipped home offices, their automobiles, and wi-fi equipped cafes and coffeehouses. Personal state-of-the-art and often mobile office equipment has replaced the dependence on the Broker's provision of these appliances. Broker firm websites have been augmented with the proliferation of agent websites designed for lead generation, data and information repositories. Is there a real estate website left that does not provide for property search? Training is ubiquitous with the ever expanding Internet. Recent experience convinces me that more agents should take advantage of this abundance.

What does a Broker bring to the table today?

Brand. Public recognition and consumer top of mind awareness accumulated from years of successful and ethical business practice. Clients may forget the name of their agent, but should remember the firm's brand long after the transaction is closed.
Foresight. Although the future is difficult to gauge, the best firms are constantly on the lookout for the next "killer app" to incorporate into their toolbox. Where is Social Media heading? What type of technology is going to climb to dominance in the years to come? How do we position and develop the tools necessary for our firm and sales associates to take advantage of future trending?
Support. Who's got your back? The great brokerages are rock steady with business policies and procedures to insure both theirs' and their sales associate's business interests. Companies built to last have developed the systems to insure high productivity as well as high compensation.

Is your Broker providing you with a well recognized and respected Brand. Does your Broker have a vision for the future and planning accordingly? Who's got your back? Is your Broker practicing "agent centric" business? If not, you owe it yourself learn more about Allen Tate, Realtors, a great real estate brokerage!

How's Your Tone?

2009-12-02T13:57:00.000-08:00

From time to time I receive words of wisdom from Attorney, Mike Wells with Wells Jenkins Lucas & Jenkins PLLC in Winston-Salem, NC. Mike is a keen observer of human nature and shares those observations freely with others. I've posted Mike's most recent message below. It is eloquent, wise, and timely. Worth a read and contemplation:

One of the best parts of the practice of law, for me, is you get to meet a lot of people. Every new client, and every person you meet, is a new story. A fresh canvas. Who are they, how did they get here, and what matters to them?

How people interact is another story as well. Human nature comes to the fore, sometimes with warts and all. When people are under some stress, the window into their true personalities is cracked open a little wider. Sometimes you see light, and sometimes you see shadow.

A residential real estate transaction is one of those stressful events when the window gets cracked open a little wider. You do not borrow that amount of money personally every day. Even the most sophisticated and experienced homebuyers feel a little emotion.

I remember very well a closing in which the husband was a banker who dealt with commercial real estate in his work. He spent the better part of the closing alternating between trying to impress everyone with his knowledge, and demeaning his sweet wife.

The time came for the couple to present their cashier’s check for the balance due, a whopping $172,000. If you lose a cashier’s check, it is like losing cash. You just don’t call up the bank and stop payment on the check. It is a very, very, big deal.

The banker buyer smartly snapped open his fine leather brief case to retrieve the check. When he could not find the check, he just as smartly, and quickly, came apart.

He finally turned to his serene wife and said, demandingly, “I can’t find the check”, as if it was her fault. Every parent has heard this tone at some point from their children when they were young.

The serene wife turned the brief case to her, just as smartly (and quickly) pulled out the check, and gave it to her husband.

Her husband quickly regained his composure and began anew his demeaning tone to his wife. He never missed a beat.

“You can observe a lot just by watching,” the Yankee sage, Yogi Berra, said. Indeed, you really can.

What all those in the closing observed that day was that a good education, a strong intellect, and well earned confidence can very easily be overtaken by arrogance and pride.

In a very real sense, so many of our significant personal strengths and life’s advantages are quickly compromised by a haughty and degrading attitude.

One of the challenges of education, responsibility, status, affluence, power, position, age, seniority, and real or apparent dominance in a relationship, is to treat all people with respect and dignity. If you have ever been on the receiving end of a person in a position of authority speaking in a demeaning tone, hopefully you will keep that memory fresh.

We should all be on the lookout for the influence of pride, the original sin of the celebrated Seven Deadly Sins. Which, pundits say, is “the ultimate source from which the others arise.”

Sounds serious, don’t you think?

What I have learned about life on the way to the courthouse is this: no matter who you are, and no matter who the person to whom you are speaking is, watch your tone. If there is one common theme from our bodies of faith, and the struggles of all people to lift themselves up from a humble beginning, it is to treat every human being with respect. Like we all want to be treated.

Personal humility towards everyone is the most active ingredient in the formula for common respect. And for all of your other considerable advantages, it may be the most important ingredient of all in the formula for a successful life. At least in the things that really matter.

How’s your tone?

2009-11-20T12:20:00.000-08:00

HVCC: Bad or Badly Implemented?

The Home Valuation Code of Conduct (HVCC) is getting a bad rap for causing what real estate professionals say is a rise in inaccurate appraisals, Alfred Pollard told a packed room of REALTORS® Friday in a risk management-regulatory issues joint forum at the 2009 NAR Conference & Expo in San Diego.

Pollard, the general counsel for the Federal Housing Finance Agency (FHFA), said HVCC was released at a time when the economy was in a massive contraction—what he called a systemic event—and that this broader picture has to be taken into consideration when talking about valuation trends. "Concerns [over valuations] might not be 100-percent tied to this code," he said.

FHFA oversees Fannie Mae and Freddie Mac, which earlier this year adopted HVCC and applied it nationwide in an agreement with the New York attorney general. HVCC expires in late 2010 but the two secondary-mortgage-market companies can retain all or parts of HVCC going forward.

It isn’t fair to criticize all appraisal management companies (AMCs) for handing out valuation assignments to inexperienced or out-of-market appraisers who are willing to work for reduced fees, said Mark Johnson, chief operating officer of LSI, a large AMC. Any AMC that lets appraisers work outside their area of geographic competency is violating appraisal standards under USPAP and they should be reported. "I do believe there have been some bad actors," Johnson said.

The average travel distance of the 20,000 appraisers in his company's database is eight to 12 miles, he said. Any appraiser who wants to travel more than 25 miles under his company's policy must explain why and get an OK. "We don't want guys driving 50 miles," he said.

Steve White of Keller Williams Realty in Santa Clarita, Calif., and chair of NAR's Risk Management Committee, said real estate professionals are losing deals because valuations are coming in far below the price agreed upon by the buyer and seller and that the process for getting valuations reconsidered doesn't work. Valuations are taking so long that there is no time to get them reconsidered before the deal collapses. And when real estate professionals try to share comparables or familiarize out-of area appraisers with unique market issues, appraisers say they can't talk to them.

Pollard and Johnson said there's nothing in HVCC that prohibits real estate professionals from sharing comparable or other information with appraisers. "You can talk; you just can't drive them to a value," said Pollard.

—Source: Robert Freedman, REALTOR® magazine

Great Personal Branding Tips

2009-11-03T10:37:00.000-08:00

5 Questions You Must Ask to Make Sure Your Personal Brand Measures Up

Posted By susanne On November 2, 2009 @ 5:14 pm In Best Practices, Business Development, Real Estate, Technology, Today's Marketplace
RISMEDIA, November 3, 2009— http://rismedia.com/2009-11-02/5-questions-you-must-ask-to-make-sure-your-personal-brand-measures-up/

Creating and maintaining a personal brand is crucial to finding success in today’s real estate market. While an elaborate personal logo and a catchy tagline are solid foundations for your personal brand, it is important that every contact you have with a consumer defines and reinforces your personal brand. Here, Robb Murry, Chief Marketing Officer for The Personal Marketing Company discusses the five questions you must ask yourself to make sure your personal brand measures up to today’s standards.

Robb Murry
Chief Marketing Officer
The Personal Marketing Company
www.tpmco.com

Building an effective personal brand goes beyond an elaborate personal logo and catchy tagline; it lies within how consumers in your market perceive you. Whether you are managing it, or even aware of it, every contact with a consumer defines and reinforces your personal brand. From your personal website and e-mail marketing, to your Facebook page and the way you answer your phone, all of the marketing communications you distribute work together to define your personal brand.

Your brand personality is how customers perceive you, for better or worse. Managing that perception across every contact with consumers is critical in today’s market where consumers increasingly perceive all real estate agents to be the same. To set yourself apart, you must differentiate your personal brand from your competitor’s.

Over the years, many agents have gotten away with selling or providing great service alone without truly managing a personal brand. Changes in the market and how agents are marketing themselves have made it clear that achieving long-term success in real estate requires an effective personal brand.

How well do you manage your personal brand? Do your customers’ perceptions match the personality you want them to see? How well do you manage these perceptions? Here’s a great way to grade yourself on how well you’re managing your personal brand.

1. Do you treat clients like real people? Your commission check might come from a company, but people are choosing to work with you. Your marketing should speak directly to the person about things that are important to them. Hint: All good marketing makes an emotional connection with consumers, not a factual one. Make sure your marketing message communicates the answer to the old advertising idiom WIFM (What’s in it for me?)

2. What’s different? Are you really any different from the other agents in your market? Trying to differentiate on great service is a common mistake. The customer expects it rather than viewing it as an added benefit—every other agent in your market can promise great service. You must find the benefit to the consumer that only you provide. Your “one big thing” must be relevant to your customer as well as to you.

3. How does your brand make them feel? What’s the emotional takeaway that your clients receive when they do business with your brand? In marketing, it’s called your “higher order” benefit. Do they feel comfort knowing you are minding the details in their best interest? Or maybe they feel empowered because of your strong negotiating skills on their behalf? Make sure you are communicating how they feel when they do business with your brand.

4. Does every touchpoint build your brand? hgMake sure that your one-of-a-kind personal brand is reinforced in every exposure people have with you. Your e-mails, direct mail, your personal website, the message on your voicemail, even your latest tweet on Twitter. Your goal is that if your name was covered up on your marketing pieces, someone familiar with your brand would still know it was from you.

5. Do you deliver your marketing message in a memorable and appealing way? Defining your personal brand in today’s market is not optional, it’s necessary. Your brand should be constantly re-evaluated to make sure the message is consistent and the right message for your audience. Agents who do not maintain the brand experience in today’s competitive market will not survive.

Always remember that your clients are people with real lives, dealing with daily challenges. Your well-rounded brand message should be targeted and communicated across all marketing channels. The key to managing your personal brand is to have a marketing plan in place for your business.

Define your message and develop an effective plan for getting that message out to consumers in a clear and consistent way. Otherwise, you’re leaving it up to the customer to decide your personal brand…without input from you. It’s then that you find you’re just another real estate agent among thousands of choices.

NC Real Estate: Let's set the record straight

2009-11-02T14:54:00.000-08:00

Kudos to the NCAR for assembling and publishing superlatives on NC Real Estate: http://www.ncrealtors.org/uploads/FortheRecord11-09.pdf

HOMEOWNERSHIP
> First-time homebuyers continue to fuel the housing
rebound. In the first seven months of 2009, first-time
homebuyers – mostly between the ages of 25 and 45 –
accounted for nearly 50 percent of home sales.
> N.C. existing home sales posted its fourth consecutive
month of improvement in September, the longest period
of monthly gains in more than five years.
> While nationwide housing production remained virtually
unchanged in September, the South registered a 7.5 percent
gain for the month, making it the only region in the
country to post an increase in construction starts.
> Over the past three years, nearly half of all states have
recorded home price gains in the majority of their metro
areas, particularly in the South, the Plains, and most of
the non-coastal West.

ECONOMY
> The nation's gross domestic product – the broadest
measure of the government's total goods and services
produced – expanded at an annual rate of 3.5 percent in
the quarter that ended in September. Up until the third
quarter, the GDP had been shrinking for nearly a year.
> N.C. continues to top a wide range of rankings. In
October alone, Asheville was named among the top 10
best affordable places to retire; Durham was predicted to
be one of the top cities to post a big rebound; and Raleigh
was named one of the top locations for newcomers.
> N.C. ranks as the sixth most popular state in the nation
when it comes to where people want to live, according to
a recent Harris Interactive poll.
> Federal stimulus money sent directly to N.C. state
agencies has saved or created at least 24,000 jobs,
according to the North Carolina Office of Economic
Recovery and Investment.

FORECLOSURE FACTS
> National foreclosure rates soared in the third quarter,
with one in every 136 homes going into foreclosure.
North Carolina, however, had the 14th-lowest foreclosure
rate in the nation, with one in every 417 homes going
into foreclosure.
> North Carolina's State Home Foreclosure Prevention
Project has helped more than 2,100 families prevent
foreclosure since its inception in January. Fight NC
Foreclosure, sponsored by NC REALTORS® and other
groups, is an extension of this Foreclosure Prevention
project. The campaign highlights a toll-free number,
1-866-234-4857, and a website: www.fightncforeclosure.
org.
> The North Carolina Housing Finance Agency, which
operates affordable housing programs in the state, was
recently awarded $895,350 in federal money that will be
used to help stem the tide of home foreclosures. This is
the third grant the agency has received, with funds
representing nearly $6 million. So far, the effort is
credited with helping more than 1,100 residents stay in
their homes.

The Halo Effect

2009-10-17T20:34:00.000-07:00

I recently found this terrific article on The Economist and just had to share.

The Halo Effect
Oct 14th 2009
From Economist.com

If we see a person first in a good light, it is difficult subsequently to darken that light

The existence of the so-called halo effect has long been recognised. It is the phenomenon whereby we assume that because people are good at doing A they will be good at doing B, C and D (or the reverse—because they are bad at doing A they will be bad at doing B, C and D). The phrase was first coined by Edward Thorndike, a psychologist who used it in a study published in 1920 to describe the way that commanding officers rated their soldiers. He found that officers usually judged their men as being either good right across the board or bad. There was little mixing of traits; few people were said to be good in one respect but bad in another.

Later work on the halo effect suggested that it was highly influenced by first impressions. If we see a person first in a good light, it is difficult subsequently to darken that light. The old adage that “first impressions count” seems to be true. This is used by advertisers who pay heroic actors and beautiful actresses to promote products about which they have absolutely no expertise. We think positively about the actor because he played a hero, or the actress because she was made up to look incredibly beautiful, and assume that they therefore have deep knowledge about car engines or anti-wrinkle cream.

Recognition that the halo effect has a powerful influence on business has been relatively recent. Two consultants, Melvin Scorcher and James Brant, wrote in Harvard Business Review in 2002:

In our experience, CEOs, presidents, executive VPs and other top-level people often fall into the trap of making decisions about candidates based on lopsided or distorted information … Frequently they fall prey to the halo effect: overvaluing certain attributes while undervaluing others.
This is to consider the halo effect in the context of recruitment. But the effect also influences other areas of business. Car companies, for instance, will roll out what they call a halo vehicle, a particular model with special features that helps to sell all the other models in the range.

In his prize-winning book “The Halo Effect”, published in 2007, Phil Rosenzweig, an academic at IMD, a business school near Lausanne in Switzerland, argued:

Much of our thinking about company performance is shaped by the halo effect … when a company is growing and profitable, we tend to infer that it has a brilliant strategy, a visionary CEO, motivated people, and a vibrant culture. When performance falters, we’re quick to say the strategy was misguided, the CEO became arrogant, the people were complacent, and the culture stodgy … At first, all of this may seem like harmless journalistic hyperbole, but when researchers gather data that are contaminated by the halo effect – including not only press accounts but interviews with managers – the findings are suspect. That is the principal flaw in the research of Jim Collins’s “Good to Great”, Collins and Porras’s “Built to Last”, and many other studies going back to Peters and Waterman’s “In Search of Excellence”. They claim to have identified the drivers of company performance, but they have mainly shown the way that high performers are described.

Further reading
Rosenzweig, P., “The Halo Effect … and the Eight Other Business Delusions that Deceive Managers”, Free Press, 2007

Scorcher, M. and Brant, J., “Are You Picking the Right Leaders?”, Harvard Business Review, February 2002

More management ideas

This article is adapted from “The Economist Guide to Management Ideas and Gurus”, by Tim Hindle (Profile Books; 322 pages; £20). The guide has the low-down on over 100 of the most influential business-management ideas and more than 50 of the world’s most influential management thinkers.

Top Ten Personal Branding Tools

2009-10-15T10:15:00.000-07:00

Lots of talk about Personal Branding these days. Social media tools are providing ever better means to build and differentiate your identity. Following is a blog post by Ryan Rancatore from Personal Branding 101 that sums up those tools you'll need to in your personal branding toolbox.

Top Ten Personal Branding Tools
by Ryan Rancatore on October 1, 2009

The top ten personal branding tools today, in no particular order:

1. Google Alerts
Google alerts are "email (or feed) updates of the latest relevant Google results based on your choice of query". Use these alerts in 2 ways: Self-monitoring: Set up an alert for your name and any variations of it. Let Google crawl the web each day and monitor any chatter about you. Research: Is your personal brand built around expertise in a certain area? Set up alerts for relevant keywords and receive all the current news, blog posts, videos, and discussions on the topic - delivered straight to your digital doorstep.

2. RSS Feed
RSS stands for "Really Simple Syndication". Simply put, it is a way to subscribe to a website's feed. Do you have a few favorite blogs that fuel your personal branding fire or consistently deliver excellent, relevant content? Subscribe to the feed and never miss another post.

3. Linkedin
Linkedin is the world's largest business-focused social networking site, and an extremely valuable tool for job hunters and those looking to expand their current network. But, just signing up is not enough. Fill out your profile to the max, grab your custom URL, and network, network, network. And, to really utilize Linkedin to the fullest, join several Groups relevant to your field. Linkedin is the most clutter-free social network you will find - Groups in particular are full of information and people willing to engage in great discussion.

4. Twitter
Twitter can initially be quite confusing. But hang in there, it is one of the best personal branding tools available today. Why? Because it is really 3 things in one package - a research tool, a sharing tool, and a networking tool. Don't dive into Twitter headfirst. Dip a toe in, start by listening, and slowly immerse yourself as you get the hang of it.

5. Tweetdeck
Twitter is a great platform - but really, it is the 3rd party apps that turn it into something special. I recommend Tweetdeck, a desktop application that allows you to sort by favorites and view mentions and direct messages in their own columns. Tweetdeck automatically shortens links, and you can follow/unfollow users from within the application. The # sign before the keyword is an identifier (known on Twitter as a #hashtag) that signifies the tweet is specifically about that particular term. You can set up similar searches for keywords relevant to your field, and receive up-to-the-second news updates.

6. Facebook
Before you roll your eyes, consider these 2 facts:
Facebook has 300 million+ active users. 40% of these users are 35 years or older.

Facebook isn't just for kids anymore. Business professionals and companies are both recognizing that the way to reach your audience today is to go to them. If you want to form connections and build your own brand, go to where the people are. Right now, that place is Facebook.

7. Google Profiles
Google Profiles is a tool so simplistic in nature that it is often overlooked. Would you like to make it to the front page of Google search results in a matter of minutes? Of course you would! Google profiles generally appear towards the bottom of the first page of results.

By now you will have likely filled out a profile on Linkedin or Facebook. Simply transfer over the same information to your Google profile, and link back to all other places you reside on the web.

8. ping.fm (I love this one!)
If you sign up for all the social networking sites listed above, you might become overwhelmed updating each site one at a time. Fear no more. With ping.fm, you can update to almost all social networks you can think of, simultaneously. Or, you can pick and choose groups. Want to update your Facebook and Twitter status, but not Linkedin? Only a click away.

9.bit.ly
bit.ly is the king of link shorteners, converting long URLs into a manageable, social-media friendly length. But, bit.ly is way more than just a one-trick pony. The real magic comes after you create and share the shortened link. With bit.ly analytic tools, you can track how many clicks your shortened URL receives. This knowledge turns your personal branding efforts into a more measurable activity. Instantly, you can see who values your suggested content enough to click through to the page. And, (peeking ahead to tool #10) this is even more important if the link is to your own content.

10. Wordpress
Last, but definitely not least, is Wordpress. Wordpress is one of several highly popular blog publishing platforms, and the option I recommend. If you only choose only one of these 10 tools, make it this one. An individually published blog is mandatory when building a strong personal brand.
Your goal is to establish yourself as a thought leader, as an expert in your field. You can't do that from Twitter in 140 characters, or in a Facebook status update. The tools leading up to this one have been building blocks - use them all, and let your blog be the ultimate showcase for your personal brand.

A Pig In The Python

2009-10-09T13:36:00.000-07:00

If you're like me, you've wondered, when confronted by news of nationwide foreclosures, just where in the world are all these foreclosed homes? To hear the media tell the story you would think that these unfortunate homeowners and their deserted homes could be found along every street in America. I came across an article included in RealtyTrac's latest newsletter that helps explain why we may not be seeing the true extent of this "shadow inventory". Thought I would share with you the possible reasons for so many foreclosure failing to come to the market. Enjoy...

The Case of the Missing REO Inventory By Rick Sharga
Realty Trends, The Latest News from RealtyTrac

Certain things in life are simply meant to be mysteries. There are age-old philosophical questions that have kept philosophers busy for millennia: What is the sound of one hand clapping? If a tree falls in the forest and no one is there, does it still make a sound? Other mysteries hang heavy with intrigue: What really happened to Amelia Earhart? And who really kidnapped the Lindbergh baby? And still others simply defy logic: If Denny's is open 24 hours a day, 365 days a year, why are there locks on the doors?

Now we can add another question to the list of ongoing mysteries: With foreclosure activity breaking records nearly every month, where are all the REOs?

It's a fair question. In normal market situations, a bank will repossess a home and usually process it through to a listing agent to put on the MLS within 30 days. In a relatively short period of time, virtually every marketable REO property finds itself listed for sale on the local MLS. Today, that's simply not the case; it's likely that between 450,000 and 500,000 properties repossessed over the past year are still not on the market. And with buyers hungry for housing bargains, and agents and brokers champing at the bit ready to sell the properties, it begs for a reasonable answer.

Lenders and servicers admit that it's taking longer to process REOs than it has in the past, and they offer a number of legitimate reasons:

-Many of the properties have title issues that need to be resolved

-Many of the properties are in states of utter disrepair

-A number of states have strict redemption rights periods, which prevents the lender from reselling the property

-A few states have extended the length of eviction proceedings

-The sheer volume of REO activity has created a "pig in the python" phenomena, (to put this in perspective, there will be roughly four times the number of REOs this year as in the last "normal" year, 2005)

What else could be slowing things down? A popular theory is that many banks are holding the properties off the market in order to defer losses. There is some accounting logic to this theory, as in most cases banks aren't required to adjust asset prices until the actual resale of the property. Another idea is that the industry is holding back the inventory to create leverage with the government in order to force the creation of a "toxic bank" or RTC-like entity that would buy the distressed assets at 50 to 60 cents on the dollar rather than the 30 to 35 cents available on the market today. This theory suggests that, seeing the threat of a massive inventory of distressed homes being released all at once, the government would "blink" rather than risk another housing market meltdown.

Whatever the reason - process issues or conspiracies - we're going to continue to see record-breaking numbers of REOs for at least the next year, and will all be watching to see when these sought-after homes finally make their way to the market.

Updated Forsyth County Market Gap Graph

2009-04-10T08:03:00.000-07:00

As a follow-up to my last post, I've updated the Market Gap graph for Forsyth County through April 2009. This update indicates that the trend begun in March has continued with Buyers and Sellers moving toward equilibrium. If the present trend holds we can expect the two to reach alignment (willing sellers and willing buyers) in the month of June. Here's the April graph:

I have to say that this is heady stuff, witnessing the movement in the real estate market. Could we be on the edge of a housing recovery? If not, it still makes for some very interesting study. Keep your fingers crossed, Mike

The Buyer Seller Gap

2009-04-04T12:30:00.001-07:00

OMG! It's been sooo long since my last post. Where did the time go? I've been busy; office consolidations, increased number of sales meetings, recruiting, coaching...the list goes on. Well, time to get back on the horse, so to speak. I've initiated a project based on similar metrics introduced to me by Steve Harney( http://www.steveharney.com/). Steve is working with Allen Tate, Realtors exclusively for now to develop and train a better understanding for the numbers that comprise the present economic scenario. Hi message is richly facilitated via the use of graphs and charts. It's amazing how clear muddy water becomes when viewed analytically through the lens of a chart or graph. I've gained a whole new level of appreciation for this powerful means of communication. One of my favorite Harney graphs is a gap analysis comparing national median listing price to median under contract price. The theory being that as long as there exists too great a gap between listing price, what a seller wants and under contract price, the price at which a buyer will buy, the market is dysfunctional. This makes perfect sense. Until prices fall enough to entice buyers to buy inventories will continue to climb as will days on market. In a buyer's market, the buyer drives the car. I've taken this simple concept and applied it to Triad MLS, Forsyth County, average List Price for residential listings and average Under Contract Price for the period February 2007 thru February 2008 (I would have run the results through March but Tempo has not posted March as of this writing). Here's the result:

Clearly there exists a gap between the two datasets. Further it would appear based on these findings that average sales price has a ways to fall in order to reach buyer expectations for what they are willing to pay. Too, sellers are not adjusting their asking price quickly enough to keep pace with those buyer expectations, which continue to drop. Admittedly, this is not the most accurate means to measure the two criteria. Average prices can be skewed by abnormal highs and lows thrown into the mix. But, given the size of the data sampled (Forsyth County accounts for over 80% of the 4 county Winston-Salem market) the gap evidenced in this presentation represents an undeniable trend. Looking closer at the indications of the graph, it is evident that the Forsyth market, buyers and sellers, has been in alignment on two occasions in the past year. Note the intersection of the two lines in the months of March and June of last year. However, since last June the two lines have diverged and indeed since December of 2008 the gap has widened as Sellers stand their ground even in the face of declining buyer interest. Inventories have risen for this same period due to what can only be described as a standoff. Buyer interest and confidence was rising through February 2008 and no doubt could swing upward once again to meet Seller expectations with improvements in employment and the economy in general. No one is going to buy a house while uncertainly looms large on the economic horizon. I'll keep you posted as I update this graph monthly going forward. Until the next posting, keep your eye on the prize, Mike

The Arrow of Time

2009-02-12T14:07:00.000-08:00

In his 1988 bestseller, A Brief History of Time, Stephen Hawking expounds upon a concept known as the "arrow of time". To summarize, time travels in only one direction at the thermodynamic, cosmological, and psychological levels. We remember events from the past but not from the future due to the one-way flow of time. What's this got to do with real estate, life , or the price of rice in China? Actually, it has everything to do with every aspect of life as we know it. Since time only travels one direction and everything ages to one extent or another as time passes, it's logical to assume by extension that our time as we know it is limited. Now, to the point I want to make. If your time is limited, are you investing it wisely? Are you leveraging time to reach your goal destination? Or, are you wasting this precious resource by neglecting to be cognizant of time's value? How do you maximize your time? Schedule how you will invest your time. Schedule your work day, your family time, your sleep time, your free time to best expend your energies in the pursuit of your goals and aspirations. Who wouldn't like to find a extra hour each day as we journey down time's arrow? Keeping to a schedule can help you achieve this if it be your goal.

It's a Web 2.0 World

2009-01-21T11:03:00.000-08:00

Dorothy has just arrived in Oz, looking around and awed at the beauty and splendor, she remarks, "Toto, I've a feeling we're not in Kansas any more." The Wizard of Oz, 1939

If only Dorothy had known about the internet she may have been quoted as follows, "Toto, I've a feeling that our world has been forever changed!" So true, so true, dear Dorothy. I remember my first personal encounter with the internet. It was 1993 at the Atlanta headquarters of Novell where I and several cohorts were attending a demonstration of this remarkable new technology. True to the nature of a new technology, the demo failed. That fact not withstanding, the explanation of how the internet worked as offered by the moderator was truly inspiring. Being an old hand at online news services and email, I immediately seized upon the unlimited potential this new technology offered. We've come a long way since 1993 and networks are still prone to fail from time to time, but would anyone seriously contemplate giving up on the internet? I think not! And now, we've progressed to the second iteration of the internet, to Web 2.0. Over the years succeeding the Dot Com Bust we've witnessed the introduction of new web tools as a result of increased bandwidth resulting in the web maturing to a computing platform. Among these many tools perhaps the best recognized are; blogs, mash-ups, video, and social media. The early web would hardly recognize itself.

But, given all this progress and the consumer's propensity to move their purchasing power to the web, I still find real estate agents who've elected to end their web progress at a basic utilization of email. Agents who have failed to incorporate Web 2.0 technology into their operating platform are destined for extinction in my opinion. If you're not up to speed on Web 2.0, run, don't walk to the nearest Borders, Barnes & Noble or other bookstore and purchase for yourself any book you can find with Web 2.0 in the title. And, while you're there would you please pick me up a Venti Chai Tea Latte, skinny and extra hot?

Blind alleys

2009-01-15T13:37:00.000-08:00

"...you can go down lots of blind alleys if the cost of doing so is low. But if you are spending a million dollars on each blind alley, you’ll be out of business in no time." Fred Wilson, Union Square Ventures (a New York based venture capital firm)

I borrowed the above quote from the Union Square Ventures website which had been sited as a link source in a blog post by Redfin founder and CEO, Glen Kelman, on the Redfin Corporate Blog (Redfin is an internet startup in the real estate space). In Glen's post he bemoans the thought process that went into Redfin's decision to change their business plan. I can well understand his angst. The real estate business is one in which we try new adaptations, new techniques, new technology in direct response to real or perceived changes in the marketplace. Often, after investing time and financial resources into these changes we find the alley we've chosen has come to a dead end. This occurrence happens daily to every business endeavor in America. Some business people give up at this point, others continue to pound their head against the dead end wall, while a savvy business person retraces their steps analyzes the problem and begins anew down an untrodden alley. Business plans are made, even destined, to change. It takes a "big man" to admit to having made a mistake, change direction, and begin again. The path to success is erratic and strewn with blind alleys bearing the footprints of those of who came and were foiled. Don't let the occasional blind alley deter you from achieving your goals.

What worked last year? What didn’t?

2009-01-04T19:27:00.000-08:00

It's a new year. Full of promise and potential. Shiny, clean, not yet marred by the blemishes and scars that surely will mark this new year at it's inevitable end twelve months hence. Looking back to the previous year can be instructive. What worked last year? What didn't? Experience is painful, but an excellent teacher. Success leaves tracks. It can be replicated, refined, and most importantly prolonged. But, if there was a magic bullet guaranteeing success in real estate, we'd all be counting our millions while sunning on a Caribbean beach.

The practice of real estate requires constant innovation while focusing on some very basic principles. Those principles include; daily prospecting, follow-up, market knowledge, and the ability to gain the trust and respect of your clients. Prospecting, no matter the form, is most effectively accomplished when set to a daily schedule. Dedicate time for prospecting, be it telephone calls, direct mail, email, geographic farming (try door hangers, they work!), or social contacts. Turn off your cell phone and concentrate on this activity. Every contact warrants a follow-up. Get a name and an email address. It's simple and it works well for follow-up and relationship building going forward. Know your market...really know the market. Become a virtual encyclopedia of data and statistical trends in your market. Be smarter than the competition. Use your knowledge to differentiate yourself in the market. Would you do business with a banker or stock broker that didn't appear knowledgeable about their trade? All the foregoing principles will not earn you a living unless you possess and are able to project the fact that you are a trustworthy individual deserving of your client's trust. This is a quality that is developed over a lifetime. Are you a person of honest and integrity?

Have a wonderful 2009. Practice what works and keep your eye on the basic principles. Mike

2008-12-11T09:32:00.000-08:00

An Opus: “The most grandiose and memorable composition of a composer’s life and legacy.”

Recently, I had the opportunity to view Douglas Vermeeren's film, The Opus: From Vision, To Plan, To Performance. I found the story line trite and the acting mediocre, but the premise and the promise of the film are so overwhelmingly compelling that one can overlook the film's deficits. We are all engaged, through the living of our lives, in producing a grand Opus. We can choose to perform with passion, grace, and perfection or we may choose instead to pursue our individual Opus with less than stellar results. Tis the season to be thinking about the coming year and how we will preform in both our business and personal relationships. Will we dedicate ourselves to performing the most memorable composition of our lives or settle instead for mediocrity? How will others view our efforts? Will they be impressed with our performance or will they conclude that we fell short of our potential? The choice is ours. Will you make 2009 the year of your Opus?

2008-12-05T20:02:00.000-08:00

Malcolm Gladwell’s new book, Outliers, The Story of Success includes a chapter entitled, “ 10,000 Hours” which is dedicated to the development of what is commonly recognized as “expertise”. Mr. Gladwell’s research indicates that the most successful practitioners in sports, music, entrepreneurship, science, etc. share a common experience. They have practiced, practiced, and practiced their art, craft, or science … approximately 10,000 hours. You may have witnessed a young boy or girl who devoted themselves to a sport or music and could be found practicing at all hours. By the time they’ve reached young adulthood, those who are fortunate, talented, and motivated, may mature to world –class athletes or musicians. Why? Practice, Practice, Practice…about 10,000 hour’s worth. The Beatles honed their musicianship during the early years in the nightclubs of Hamburg, Germany, playing eight hours per night up to seven days per week. Fate and circumstance may have favored their international success, but it cannot be denied that they were prepared for this success by virtue of the thousands of hours spent performing. My point is this: Are you getting the practice, experience, and knowledge necessary to fine tune your real estate skills to the point of attaining “expert” status? Is your environment conducive to providing you the business opportunities necessary to acquire the skills that will qualify you as an expert? Think about it...

Proof of Hope

2008-11-28T11:56:00.000-08:00

A close friend sent me an email message last week entitled, "Proof of Hope". Someone had probably forwarded it to her, just another innocuous internet circulation. The authorship was unattributed, but I did some research and found that the article was written by Andy Andrews author of, The Traveler's Gift. Given the season of thankfulness, I decided to include Mr. Andrews article in this week's post.

The Proof of Hope by Andy Andrews

At this moment, I am alone outside, watching the sunrise over the ocean on the north shore of Oahu. A quick calculation reveals that I have personally experienced more than 18,000 dawns in my life. Of course, most of them occurred without my presence! Nonetheless, I have "gotten up and gotten started" more than 18,000 times.

Many of those mornings have been spectacular. Just like you, I know what it is like to wake up full of joy and gratitude.
I remember my first morning as a husband and my first new day as a father. It was only five years ago that I sat in my living room and watched the "Good Morning America" team on ABC reveal The Traveler's Gift to the world. I have awakened with my whole family in one bed, giggling at me as I snored. I could go on, but you understand my point:
personally and professionally, I have had some awesome mornings.

Also lurking in my memory are some days that did not begin well. And many of those days very quickly got worse. The mornings after my parents died were tough. Waking up under a pier or in a stranger's garage is not fun. Three and a half years of rejection by 51 publishers was a discouraging start for The Traveler's Gift. Just like you, I know what it is like to wake up full of doubt and fear, achingly despondent and demoralized.

I have "begun again" the day after a hurricane destroyed our house. I have gotten out of bed the day after my gas and electricity were cut off because I couldn't pay the bill. I have started mornings hungry because I didn't catch anything and couldn't quite bring myself to steal. People have broken promises, business plans failed ... I could go on, but you understand my point: personally and professionally, I have had some wretched mornings.

Yet, one tiny string of thoughts has kept me calm enough to function even during the worst of times. First, the acknowledgment that tough times are normal seems to help.
Tough times are nothing new and they aren't exclusive to one person or group of people. We are all in a crisis, coming out of a crisis, or headed for a crisis.

In addition, I have discovered proof of hope that has consistently lifted my heart, mind, and spirit to a point of forward motion. Very simply, it is this:

* Even in the worst of times, I must remember that I am still breathing.

* If I am still breathing, that means that I am still here.

* If I am still here, that means that I have not completed what I was put here to do.

* If I have not completed what I was put here to do, that means that my very purpose has not been fulfilled.

* If my very purpose has not been fulfilled, that means that the most important part of my life has yet to be lived.

* If the most important part of my life has yet to be lived, then it doesn't really matter how old I am or how broke I am, how long I've tried or how depressed I might be ... Here, at last, is proof that the best part of my life is ahead of me! Without a doubt, there is more laughter to come, more success in my future, more children to teach, more friends to influence. There is more.

There is more ... and the promise is proven by the simple fact that I am still breathing. I am still here.

Of course, I must confess that my greatest aggravation with God is that He never seems to be under any obligation to tell me what He is doing in my life. We will talk more at some point about the purpose and benefits of tough times. For now, no matter what you are experiencing, it is enough to take a deep breath and remember:

I am still here. There is more.

The Dip

2008-11-21T07:43:00.000-08:00

"If you’re not going to be #1, you might as well quit now.” Seth Godin, The Dip

Seth Godin’s new book, The Dip, is a primer on the art of strategic quitting and an excellent example of just how powerful mental models can be. For example, remember when you first began your real estate career. You started out with a lot of energy, making strides toward your goals. The excitement and motivation were strong and euphoric. Then, you hit the wall. It may have been health issues, the economy, market conditions, lack of Broker support, lack of technology skills, or any combination of the foregoing. Things got tough. You began tackling the less sexy aspects of your goal, such as; prospecting, business planning, or farming. Progress is slow and painful with no tangible benefit in sight. At this point many agents give up. But you see the future beyond the Dip, and you want it, so you press on.

On the other side of the Dip, things appear to be bright and sunny. You come out on top, you're successful, you've persevered, you're recognized as being among the best in your market. The time and hard work you spent pushing through the Dip was worth it and you'll continue to real the rewards until someone or something pushes through an even bigger Dip that changes the game yet again.

However, there is another mental model which we encounter frequently in the real estate business which has the potential to wreck many a promising career. Seth Godin refers to it as the "Cul-de-Sac". It''s a model that represents things that ultimately aren't worth doing. It's a trap in which it's easy to get stuck. You grind your way forward, giving a lot but gaining little ground. This "dead end" isn't going to lead you where you need to go. Examples? Sure in real estate there are plenty: print media advertising (no future, readers have moved on), self promotion vehicles (consumers are smart, they want value not glamour shots), cold calling (DNC knocked this one in the head, and no one is going to answer the door when you knock) and promotional items (if your value proposition is expressed as a calendar or magnet you've probably hit the wall). These are just a few, there is an abundance of other dead ends in real estate. The point is not to get caught in dead-end activity. Sure, placing a print media ad is "fire and forget" and it makes the seller happy. But, you'll never get out of the Dip if you remain stuck in the Cul-de-Sac. Why not try an email campaign, or a new web strategy, or SEO/SEM? Drastic change is scary and therefore most agents avoid it, choosing to cling to the mediocre status quo.

What's an agent to do? QUIT! Identify those areas in your life and your business in which you're not making progress, vacate these positions without reservation or remorse. Go find yourself another Dip in which to invest your time and energy. The Dip is your friend. It forces you to muster the attitude and determination to learn new skills, adopt new technology, or change your business model. So long as you maintain this energy and direction you can find your way through it and on to the top of the heap. If you're not making progress through the Dip...Quit! Mike

Get on board the Cluetrain.

2008-11-14T12:49:00.000-08:00

Back in 1999, Rick Levine, Chris Locke, Doc Searles, and David Weinberger, all Silicon Valley veterans published what has became a roadmap for eCommerce development. Their document was appropriately named The Cluetrain Manifesto. A single paragraph summarizes the essential position taken by the writers:

"A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter—and getting smarter faster than most companies."

The Cluetrain Manifesto is a set of 95 theses organized and put forward as a manifesto, or call to action, for all businesses operating within what is suggested to be a newly-connected marketplace. The 95 theses contained within the manifesto aim to examine the impact of the internet on both consumers and businesses serving consumers.

Of the 95 theses, my personal favorite is #89: “If you don’t quite see the light, some outfit will come along that’s more attentive, more interesting, more fun to play with." How true in today's market in which information and knowledge is valued more than brand, relationships, or cost of service. According to NAR research 81% of buyers begin their search for a house on the internet. Thanks to this internet research buyers know more about the subject property than do the real estate agents seeking to serve them. It's as if the authors of the Cluetrain Manifesto were addressing themselves directly and individually to the real estate business. Today, consumers can find suitable houses, research the home's history, calculate the home's value, gather neighborhood data, and in an increasing number of cases negotiate the purchase price online. Are you equipped to deal with this phenomenon? Is your prospecting and market outreach designed to meet and interact with this intelligent consumer on their turf? Are you able to communicate relevant facts and data in a timely manner thereby positioning yourself as the best and smartest source for counselling and advice? If not, you need to get on board the Cluetrain! Mike

Is the price right?

2008-11-07T11:53:00.000-08:00

How do you know if your new listing is priced "right" for the market? Given the fact your CMA is based on purely historical data, how do you know you've not inadvertently over or under priced that new listing? In today's market the greater likelihood is to either permit the seller or your desire to please to dictate your pricing recommendation. Both will probably result in "overpricing". If this sounds familiar, consider yourself a weak agent. Or at least one who succumbed to a moment of weakness somewhere between winning the listing and actually setting a market offering price. Just for you, I have the following recommendations:

Check the seller's motivation for selling in this market. Based on the news broadcast over national media, only a hermit wouldn't know the real estate market has slowed and that sellers must be willing to sell for less then buy again at a discount when purchasing their next home.
Know the metrics. The real estate profession doesn't attract rocket scientists, but you've got to know, and I mean really internalize, statistical data such as; DOM, list to sell ratios, price per square foot, absorption rate, and supply/demand curve. Know these metrics not only for the MLS, MLS zone, zip code and subdivision but right down to the street level. After all, ALL real estate is local.
Know your elevator pitch. What makes you valuable to the seller? What do you bring to the selling process and why this seller should do business with you. If you can't recite your pitch off the top of your head and on demand instantly...go back and practice some more.
Be confident but not overbearing. Your confidence is derived from your knowledge of the market. Lots of knowledge, lots of confidence. Agents often become overbearing when they feel it necessary to inflict their price opinion on the seller. Are you buying or selling? Let the "research" advise the suggested price point or range. Your opinion doesn't count unless you're prepared to write the seller a check and buy his house.
Finally, do not confuse price with ability to sell a house. Typically, it's the overpriced listing that belongs to the least competent agent. If a seller does not possess the requisite motivation, is not willing to recognize changes in the market, and insists on overpricing his house...walk away. Best to catch this one as an expired listing to relist.

That's my two cents on overpricing. Seems there are so many overpriced listings on the market today that every buyer feels the need to chisel down the asking price whether the house is priced right or wrong. Sadly, this market condition is likely to persist until buyers and sellers realize we've hit the market bottom and demand begins to push the market in the opposite direction. Let's all hope that correction occurs soon. Mike

2008-11-03T12:03:00.000-08:00

I read with interest and shock an article in this weekend's Inman News entitled, "Nearly 10 million homes upside down: First American releases state-level analysis". The article goes on to report that, "More than 7.5 million single-family homes are worth less than what's owed on their mortgages, and another 2.1 million were very close to being upside down at the end of September, according to an analysis by First American CoreLogic." Well, duh! Who promised that homeowners would see double digit escalating values in housing forever? For that matter, since when does being "upside down" or "underwater" constitute grounds for mass panic? Any builder will tell you that he or she has been upside down on a considerable number of occasions when they've invested more dollars in the construction of a house than it will bring on the open market. Just because you're under water doesn't mean the homeowner is ready to lock the doors and mail the keys to the lender. Most of us bought the houses in which we now reside for the primary benefit of shelter. After all, if I'm not living in my own home, I'll be required to rent one from someone else. If the Congress and Administration truly want to solve this housing crisis then put people to work. Jobs insure that citizens can afford the houses they currently own, that they can bootstrap themselves out of housing debt, and when the need or desire necessitates purchase another home down the road. It's not bailouts we need, it's a job for Joe the Plumber, so he has the confidence to weather this storm. What's so difficult about that?

Welcome to Mike's Market Musings

2008-10-31T11:00:00.000-07:00

Welcome. At this blog you'll find insightful commentary on various topics related to: real estate brokerage & practice, current market conditions, real estate sales. These views are mine and should not be construed to reflect those of my employer, friends, and associates. Don't expect the author to parrot routine, mundane, or popular thoughts on the state of the real estate business either national, statewide, or local. You may; on any day, find the politically correct representation of the current market turned on it's head. Here's where you'll quite often find the unconventional and contrarian interpretation of the latest real estate related news. The calf path is never straight and neither will we be in the pursuit of added knowledge. I welcome your reply commentary. Blog on, Mike