#RE2020: Disrupt Real Estate

October 28th marks the 30th anniversary of Ralph Nader's first speech to buyer agents.  At the time, buyer agents were the rising stars of the real estate industry because they were committed to protecting and empowering millions of homebuyer clients, particularly first-time homebuyers.  For the same reason, they represented a threat to the traditional real estate industry which leading consumer advocates like Steve Brobeck of the Consumer Federation of America called "an informal cartel."  Nader used the occasion to criticize the real estate cartel's attempt to co-opt the buyer agency movement by papering over conflicts of interest.  He call blasted dual agents and designated agents, calling them the "language of hypocrisy."  Nonetheless, within a few years, conflicts of interests were normalized in the real estate industry as traditional brokerages competed to collect both sides of the commission.  

Fast-forward to the pandemic-driven Great Real Estate Panic. Without checks and balances in the housing market, homebuyers waived contingencies and normalized overpaying for properties.  At the peak, 1 in 6 homebuyers paid $100,000 over asking price across Massachusetts.  Even before prices began to decline this Fall, 1 in 3 homebuyers already admit they overpaid and buyers remorse is running at 70% among Millennial homebuyers.  

How did we get here and what can be done to protect homebuyers from another boom / bust cycle?  Listen to this retrospective and add your own thoughts about creating a Homebuyer Bill of Rights and a long-overdue Consumer Movement in Housing.  Nader called for that 30 years ago, and a recent article in The Economist suggests that coming political storms might be an opportunity to mobilize a consumer backlash against the #RECartel.  

What's your take?

https://bit.ly/Detonate_BillOfRights

It’s only been a few days since recording this conversation with my daughter, and in that timeframe Fortune Magazine has published a story warning that a “full blown” price correction is already unfolding. Another leading real estate data provider underlined that conclusion by declaring the real estate frenzy is over. 

What’s your perspectives? If you’ve been through previous real estate cycles, what advice would you give to the next wave of homebuyers, #GenerationPricedOut? Let’s us know if you’d like to experiment with social podcasting and we’ll set up a mini-interview like this (or lead a 2-5 minute audio message here on Anchor.fm).

Watching the housing market and want to celebrate the end of the Great Real Estate Panic?  See SPECIAL OFFER from homebuyers & fellow buyer agents.

#PriceCorrection2022:  After documenting a record high 1 in 7 MLS listings selling $100,000 or more over asking price, decided to tour open houses in one of the strongest housing markets in the Northeast, Cambridge Massachusetts & it's neighbor, Somerville.  What I quickly discovered was surprising -- nearly every listing was priced below it's Zestimate; not just by $10 to $20K, but a deep discount that would send bids $100K over asking price.  

Why? Are listing agents using "Underpricing-As-A-Strategy" to generate #FakeFrenzy? We offer four bullet points and invite your own, particularly if you are a local homebuyer or fellow buyer agent trying to #ProtectHomebuyers from overpaying or being manipulated in a BLIND #BiddingWars.

If you visiting open houses this weekend, too? Want to TweetUp somewhere to compare notes and thoughts about the housing market over beer?  We call it real estate on tap, or #REonTap.

The housing divide is pulling Massachusetts apart, that's the headline affordable housing advocates are calling required in yesterday's Boston Globe.  But behind Kara Miller's column, The Big Idea, is a sequel to the movie, The Big Short unfolding? An epidemic of BLIND bidding wars caused a record high 1 in 7 MLS sales to soar $100,000 over asking price across Massachusetts last week, 4/30-5/6/22.  

Bidding wars of any magnitude were rare in the past.  Writing 25 years ago in Behavior of HomeBuyers in Boom & Post-Boom Cycles, Nobel-prize winning economist Robert Shiller warned that just 6 to 10% of homes selling over asking price was consider an overheated market. 

Ironically, nationwide, headlines are warning the grossly overheated pandemic housing market it turning. Nationwide, 1 in 5 single-family listings are already seeing price reductions before the peak of the Spring market. 

If that's three months ahead of the normal pace, what will the market look like in August -- the traditional summer markdown season? 

If @MoodysAnalytics's Mark Zandy already estimates Boston real estate is 14% overpriced, are Boston homebuyers making foolish decisions or getting The Big Shaft? That's a question we've asked the Attorney General's office to investigate, see complaint filed five weeks ago, 4/8/22.

https://bit.ly/BidWarComplaint_MassAGO

Why are 1 in 7 homebuyers paying $100K over ask when the Boston market is overpriced and #PriceCorrection2022 is predicted?  Cast your vote on the accompanying poll, and share your audio comments here or on this Twitter thread:  

https://bit.ly/BidWarIrony_NPRThread

National Consumer Protection Week, 3/6-12/22 is dedicated to educating & protecting consumers, but content related to housing & real estate has been notably absent in the past.  Beyond #Homebuying101, are there urgent issues that need to be addressed from the homebuyer's perspective?   @Redfin's recent survey found that 77% of consumers -- both buyers and sellers, say we're in a housing bubble, and @BankRate's survey found that 64% of Millennial homebuyers have #BuyersREmorse?  

Despite low inventory hype, @RealtorDotCom's own survey found 1 in 4 homeowners #Intend2Sell.... is it time to talk about #IntentionInventory instead of using Active MLS listings as a measure of #PentUpRESupply?  

We invite debate on those questions and invite your own.  RECALL -- Real Estate Consumer Alliance -- is an "adhocracy" that welcomes feedback from multiple stakeholders.  What do you think homebuyers should know going into the Spring housing market in 2022?