Editor’s note: The following excerpts written by Inman News Publisher Bradley Inman were taken from the Inman News Blog.
Editor’s note: The following excerpts written by Inman News Publisher Bradley Inman were taken from the Inman News Blog. Give us your take on “glass half full” or “glass half empty” by clicking on the links under each entry to join the discussion.
Glass half full
The housing market may be buckling under, but the trend isn’t slowing down the online real estate community, which has ample talent, passion and money.
1. Capital: In the last two years, Zillow, Redfin, Move and Trulia have landed big rounds of fresh funding. Google, Yahoo, MSN and AOL have renewed interest in the category. I frequently receive calls from venture firms, asking about this or that start-up. A swirl of angel funding is helping interesting early-stage companies. With the transformation of television to the Web, look for the big TV players to seek opportunities with the online realty category.
2. Brains: Young, bright, educated people are getting involved in the online real estate category again. They are working at online firms such as Zillow and Trulia or jumping in with their own start-ups or blogs. Example: Vanessa Fox leaves Google for Zillow. Plus, a new generation of well-educated and tech-savvy Realtors is joining the industry. Have you met Kevin Boer, Realtor, 3 Oceans Real Estate or Florida’s Ryan Roslansky?
3. Passion: The real estate blogosphere has spiced up the entire category with new voices such as Curbed, Bloodhound, Urban Digs, Transparent Real Estate, The Future of Real Estate Marketing, Matrix and many others. Check out LittlePinkHouses: excellent writing, perspective and progressive point of view. Also enriching the category is ActiveRain, a social networking phenomenon taking the industry by storm. The big social networking sites — LinkedIn, FaceBook, YouTube and even Twitter — are creating nests for real estate innovators who are using these platforms to network and market their services. These new faces are connecting and collaborating, creating new and fun applications and services.
This technology spirit is in stark contrast to the shaky real estate market. Four years ago, the real estate market was booming, but technology innovation was sparse, hung-over from the dot-com bust. How quickly fortunes change.
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Glass half empty
The housing market continues to worsen. Yesterday, I was in Southern California where year-over-year sales are off 30-50 percent. Anyone who says bad news is localized is smoking dope. Certain markets act out first and some are weaker than others, but the entire housing market is suffering now.
All of the numbers are going the wrong way. The 30-year fixed-rate mortgage has jumped to 6.71 percent. The foreclosure numbers last week were ugly: one in every seven subprime loans is now past due or in foreclosure, and 6.12 percent of all loans are in the troubled bucket. The credit squeeze has followed with first-time home buyers having fewer loan choices and facing more stringent underwriting standards. Now the move-up housing market is feeling the pain.
The rule of law has returned to the housing market. In 2002-2005, standards collapsed and the industry ran amok. Tried and tested practices for appraisals, underwriting and disclosures gave way to greed, speculation and fraud.
Industry turmoil along with higher interest rates, a credit squeeze, a slowing economy and declining consumer confidence add up to bad housing news for all of this year and next.
One strange bright spot: the weak U.S. dollar (not something to be proud of) has attracted people from all over the world who want to buy our stuff cheap, including our real estate.
In a recent InmanTV segment, Jonathan Miller of Matrix told me about the wealthy Irish coming to this country to buy apartments in Manhattan. This global market combined with the rewards of Wall St. have kept this little island hopping, but according to brokers I talk to in New York, even this market is showing signs of weakness. UGH.
Click here to join the “Glass half empty” conversation at the Inman News Blog.