In many private conversations I’ve had, the general consensus has been that this tax credit hasn’t had much impact, that people really don’t care, that first-time home buyers aren’t buying that many homes, even that people are not aware of the credit.

Personally, we have yet to have a potential home buyer say, “The only reason we are buying now because of this tax credit”. (And that’s a good thing, as it is a horrible reason to buy if that’s the only reason you are buying.)

But that doesn’t mean the tax credit is not a factor. Many of our buyers mention it as one of several reasons they are buying; including the tax credit with things like historically low interest rates, low home prices, “good deals”, and the age-old “I’m tired of renting”.

Are people aware of the tax credit? Is there interest in it?

I’ll let the statistics for this blog speak. You tell me. Here are the top 25 search terms people used to find this blog last week.

18 of the top 25 search terms used last week were related to the $15,000 home buyer tax credit (a total of 1,416 visits).  Granted, these top 25 searches only account for 1,730 of the 12,058 visits here last week, but the point is people are looking for information on the tax credit, and presumably some fraction of those are acting on that information. For how many the tax credit is a major factor in actually deciding to purchase a home is the big question that can’t really be answered.

For the statistically obsessed, there were 8,210 visits here last week from search engines – and 5,096 search terms were used. That’s a testament to the “Long Tail” of search. (And if you care, 7,229 of those 8,210 searches were done on Google – a testament to the fact that Google is taking over the world.)

A total of 2,975 visitors using a search term that included “tax credit” stopped by last week – that would be 24% of the visitors to this site.

Since the tax credits were first discussed back in February of this year 31,168 searchers using 11,637 different terms including the words “tax credit” have visited Phoenix Real Estate Guy.

True, 31,000 people isn’t a lot compared to the general home buying population of the U.S. But this is just one insignificant spot on the vast, world wide even, web. If there are 31,000 people looking for information here, how many more are looking elsewhere?

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Here are some of the “highlights”:

• Sales of existing single-family homes were down 30 percent last year from the 2005 level to 4.35 million, their lowest level since 1997.
• New home sales showed a record-breaking plunge of more than 60 percent from 2005 to 2008. Actual declines were even larger because cancellations, which are not backed out of reported sales, rose over the period.
• Housing starts were down by more than 30 percent for the year in 2008 and more than 50 percent from the 2005 level.
• The national homeownership rate slid from its peak in 2004 to 67.3 percent in the first quarter of 2009, erasing all of the gains since 2000.
• Measured on a monthly basis and adjusted for inflation, the national median home price fell by 29.8 percent from October 2005 to January 2009.
• According to the Mortgage Bankers Association, at least 3.2 million homeowners entered foreclosure in 2007 and 2008, and an additional 600,000 entered foreclosure in just the first quarter of 2009.
• Foreclosure rates in California, Arizona, Nevada, and Florida surged from less than 0.9 percent at the start of 2007 to 5.9 percent by the end of 2008. According to the Mortgage Bankers Association, by the first quarter of 2009 there were nearly 800,000 outstanding loans in foreclosure in just those four states, amounting to 46 percent of the national total.

And it goes on and on.

The Bright Side?

The “echo boomers” – children of the baby boomers – are beginning to reach home buying age. A lot of baby boomers had a lot of children, and these echo boomers are beginning to enter the workforce and could help fuel a revival of the housing market.

Additionally we are beginning to see signs of recovery, or at least stabilization, across much of the Phoenix real estate market. Sales are up, inventory is down,  and prices are stabilizing (generally speaking). Some have even “called the bottom” and some continue to proclaim “now is a great time to buy”. And it may indeed be, for some people in some circumstances. I’ll stand pat in my assessment that there is never a right time to buy for everyone.

Fair Warning

As mentioned on this blog countless times in the past, it is important to understand that real estate is local – very local. Taking reams of data and aggregating them into national-level metrics and indexes can be somewhat misleading if what you are really interested in is what is happening in Neighborhood X. Even aggregating across a metro area the size of Phoenix often won’t tell the true story at the “hyper local” level. Yes, national/metro trends are important, but they do not tell the full story.

If you like data, you’re going to love Harvard’s report. Here is where to find it:

The full report, “The State of the Nation’s Housing 2009”. (color, PDF)
The black and white version (recommended if you are going to print the report).
State of the Nation’s Housing Fact Sheet (PDF).
State of the Nation’s Housing press release.
Previous “SON” reports (1998 – 2008).

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Here is the primary photo (the photo that initially displays when a listing is pulled up):

This is the actual size. Not a bad photo. Personally I would have taken 10 seconds and cropped it to this:

This helps minimize the… baseball field lights? in the background and puts more focus on the home. But even without cropping, it’s not a bad shot of the front elevation.

Here is where it gets interesting. There are four more photos of the listing. Granted, our MLS allows the listing agent to upload unlimited photos, and five probably isn’t enough. But at least there are backyard and  interior shots.

Here they are, in actual size:

Isn’t that helpful? Four photos measuring a whopping 65 x 42 pixels each. I can’t even figure out how to get my camera to take pictures this small. Even if I could, why?

But wait, it gets better. Our MLS system, in a rightful effort to standardize the photo display, automatically resizes photos. Here’s what it shows for the teeny-tiny pictures after resizing:

It’s a kitchen.

Software does a good job taking big photos and making them smaller. Making small photos bigger? Not-so-much.

Photos are good. Ideally they should be big enough to see. Take BIG pictures as you can crop and resize them and they won’t get all pixilated. Can’t afford Photoshop to crop your photos? Get paint.net. It’s free.

Sellers – be sure to view your home listing on-line. No, you shouldn’t have to check up on your agent. But it’s not a bad idea…

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I still don’t get it.

Today, as I was torturing myself on Trulia Voices – a Q&A like forum where real estate buyers and sellers ask questions and agents present themselves as the Second Coming – I noted quite a few questions about listing photos. Or lack thereof.

Questions like:

It goes on and on and on. A search on Trulia for “more pictures” returns 534 results. Search for “more photos” and you only get 434 results.

These search results are filtered by “recent activity”, so these 969 inquiries have only come in the last couple of months.

People want need to see photos when looking for homes on-line.

Agents, load the photos up, it’ll help sell your listings.

Sellers, demand you agents place photos in your on-line listings.

Buyers, be aware that most buyers blow right past listings without photos. You may just find some hidden gems in those photo-lite listings.

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Photos From Inman Connect

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I recently got approved by the Arizona Department of Real Estate to teach Continuing Education hours. In and of itself, that’s not so different. There are a gazillion people certified to teach real estate classes.

What is a little different is the fine folks at First American Title’s Eagle University have helped me get a class on electronic media approved for 3 continuing education hours in the Commissioner’s Standards category. We’ll be integrating how to “do social media” with bits and pieces of how to stay within State and Department advertising and disclosure guidelines, professional conduct, broker supervision and control, and more.

I promise it won’t be as boring as it sounds.

Plans are to teach the course at various locations across Arizona. We’ll also be developing other credit-hour courses as well.

A big thanks to First American for working with me (and having faith that I won’t say anything to get us all fired). Hopefully we’ll spread a little knowledge and have some fun in the process.

The first class will be delivered sometime in late July, date to be determined.

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They do the right things for their members. And for the general public.

Recently the Metropolitan Indianapolis Board of REALORS (MIBOR) sent one of their own members, Paula Henry, a cease & desist letter basically forcing her to de-index her web site’s home search. This caused much consternation among the more tech savvy real estate agents across the net. We just didn’t get it, and I know many of us sat back and pondered what we’d do if our own Multiple Listing Services decided to pull the rug out from under us.

Today Bob Bemis, the Chief Executive Officer if the Arizona Regional Multiple Listing Service, sent me their position statement on this issue.

It makes me proud to be a member of this MLS.

Below is the statement in its entirety. You can get a PDF copy here.

For Immediate Release:

Arizona MLS Takes Stand on “Scraping” and “Indexing”

RECENT NAR INTERPRETATION CREATES COMPETITVE DISADVANTAGE FOR REALTORS® 

PHOENIX, AZ – JUNE 10, 2009 –   The Arizona Regional Multiple Listing Service (ARMLS) is taking a stand on a recent National Association of REALTORS® (NAR) ruling on the technical interchangeability of “scraping” and “indexing” as it pertains to display of the IDX Database on the Internet.  A recent controversial interpretation issued through the Center for Real Estate Technology (CRT), NAR’s technology arm, advised members that “scraping” and “indexing” are in effect the same practice and represent misappropriation of the IDX Database.  ARMLS believes that this ruling places NAR members at a distinct and serious competitive disadvantage.

ARMLS maintains that the CRT opinion does not factor in the end use of the “scraped” and “indexed” listing data.  It fails to distinguish between benign and malicious “scraping” and “indexing.” These practices are termed benign if they provide intended benefits to the consumer and the buyers and sellers whom the REALTOR® serves, and are not in conflict with the ARMLS IDX Policy.  They are deemed malicious if they utilize the listing data in a manner foreign to the original intent of the REALTOR® and the property owner, and are incompatible with the ARMLS IDX Policy. The practice of “scraping” or “indexing” by search engines for the purpose of displaying or indexing the data for consumer property search, and which ultimately direct the consumer back to its source, is benign, and is in sync with the REALTOR’S® intention when displaying listings on the Internet.  When a third party, e.g. a search engine, through “scraping” or “indexing” misappropriates and uses the listing data for purposes not intended by the property owner or REALTOR® , these practices become malicious and should be prohibited.    Any interpretation by NAR prohibiting REALTORS® from allowing search engines, such as Google, from benign “scraping” and “indexing” listing data puts the REALTOR® at a distinct competitive disadvantage.   

The ARMLS IDX Policy contains the statement that “IDX Brokers must protect the IDX Database from misappropriation by employing reasonable efforts to monitor and prevent “scraping” or other unauthorized accessing, reproduction or use of the IDX Database.”  The interpretation of this policy was not intended to discourage dissemination of listing information through search engine indexing or to discourage brokers or their permitted licensees who offer listings from optimizing their listings to achieve higher search engine placement.  ARMLS supports and encourages a change in NAR’s interpretation of “scraping” and “indexing” that factors in the results of such activities and removes any competitive disadvantage that NAR’s current opinion creates.

About ARMLS:  Arizona Regional Multiple Listing Service is the REALTOR^® owned listing service for central Arizona.  ARMLS provides services to more than 32,000 brokers and agents of the Phoenix, Scottsdale, West Maricopa, Southeast Valley, and Western Pinal County Associations of REALTORS^® and their affiliates.  For more information about ARMLS, please visit www.armls.com or contact Bob Bemis, CEO, 130 W. Priest Dr, Suite 101, Tempe, AZ 85281, at bob.bemis@armls.com or 480-303-7224. 

This battle isn’t over. That two separate MLS’s can have diametrically opposed interpretations of a policy points to a fundamental flaw in said policy. I’ve been asked to serve on the NAR Multiple Listing Issues and Policies Committee and will do whatever I can to get the language changed and help educate MLS boards so that ALL the MLS’s can issue a statement as crystal clear as ARMLS.

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Surprise (Arizona) police Tuesday arrested a man they say stripped his foreclosed home of fixtures and other equipment.

. . .

A grand jury indicted Garcia on charges of criminal damage and defrauding a secure creditor, giving police probable cause to arrest the former Surprise resident at about 1:25 p.m. on Tuesday.

My reaction?

It’s about time.

Don’t get me wrong, I have a lot of empathy for people that lose their home. For many, things are completely out of their control and it is a very sad thing.

But as a real estate broker, I see homes all the time that the owner has completely trashed.  Nothing appears to be safe from these types. Missing cabinets, counter tops, flooring, air conditioning units, toilets – you name it and some pissed-off disgruntled “victim” of foreclosure has stolen it.

Yes, stolen it. It is stealing people, plain and simple.

Read the comments on the AZ Central article. Some people are saying the cops are screwing this guy, some practically make him out to be a hero.

He’s an accused thief, plain and simple. He was under contractual obligation to maintain the home. That’s part of the deal when you get a mortgage – the lender has a lien on your home and has the right to recover the asset if you fail to pay back your loan. And part of that asset includes fixtures attached to the home.

Let’s say you get a car loan and for whatever reason stop making the payments.  You know the repo man is dropping by for a visit soon. Do you rip the seats out of the car, remove the engine, put the car on blocks and swipe the rims? Every day people are doing tens of thousands of dollars of damage to their homes – homes bought with loans the owner is under contractual (and ethical) obligation to maintain.

Maybe you think, “So what. The banks are the ones that have to eat the loss and they deserve it!”

Wrong. If you are a homeowner, Joe Thief’s criminal act just negatively impacted YOUR home value. Like it or not, when your neighbor guts his house, the value of your home declines.

So Joe Thief isn’t just screwing the bank. He’s screwing you too.

Shar Rundio wrote a great post last month citing the specific Arizona statute on this very subject.  Arizona Revised Statute §44-1219 makes it a Class 5 Felony to strip your home prior to foreclosure.

Here’s something to ponder as you are taking a crowbar to your kitchen – is this sink and faucet really worth spending time in the pokey married to Bubba and his pals?

If you’ve never seen first-hand what some people do to their homes, here is a short video I shot back in January at a trashed out home in Agritopia. There are worse examples, believe me.

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TARP, bailouts, cram downs, loan modifications. Grants, workshops, faster short sale responses. The list of ideas and thoughts on how to fix “the foreclosure problem” are almost as endless as they are bureaucratic, and expensive.

Here is a thought…

What if we did nothing?

Blasphemy! DO NOTHING? “Are you insane? We have to do something… why we can not simply stand around and wait for this thing to fix itself!’

Why not?

Markets, be they stock markets, commodity markets or real estate markets all behave in similar fashion and are guided by basic economic principles. The Law of Supply and Demand, the economic general equilibrium theory, elasticity – these and more dictate the behavior of markets, including the real estate market.

Back in 1776, Adam Smith wrote about the “invisible hand” in The Wealth of Nations. Grossly over-simplifying and paraphrasing, the theory of the Invisible Hand states that the greatest benefit to a society is brought about by individuals acting freely in a competitive marketplace in the pursuit of their own self-interest. 

The government really has no place interfering in a free market economy. The real estate market will, over time, move toward equilibrium and “fix itself”.

Already we are seeing a shift in the lender-owned home market in some of the nations hardest hit areas – Phoenix, Las Vegas, most of California – all are showing signs of recovery. At this writing, there is just under a one-month supply of bank owned homes in the greater Phoenix metro area. Yes, some of this is a result of major lenders and GSE’s (Government Sponsored Entities –Fannie Mae and Freddie Mac) imposing a moratorium on foreclosures, but it is also a result of the aforementioned economic law and principles in action.

Prices have plummeted, driving investors and regular homeowners alike to see value in the purchase of real estate. Demand is up, supply is down. Take a look at a supply and demand curve, and what you’ll see is a market on the edge of – gasp! – prices about to increase.

Supply and Demand isn’t a theory; it is an economic law. The real estate market wants to be in equilibrium, and inventory and demand and pricing will over time adjust on their own accord to reach this equilibrium.

The question of course becomes one of whether or not these natural adjustments will occur swiftly enough to keep the real estate market from spinning down the toilet.

As one who sells real estate for a living, in Phoenix, Arizona, I think I could make a reasonable argument that the market has already been flushed down the toilet. Home values are now 50% off their highs of two to three years ago. Large brokerage firms are shuttering the doors on offices. Real estate agents are finding “real jobs”, filing for bankruptcy and facing foreclosure themselves.

The problem with the government stepping in to “fix” the market is, and let’s be honest here, they don’t know how to fix it. That is not their fault. No one knows how to fix it. No one has successfully implemented a long-term fix for a market as complex and dynamic as the real estate market.

Oh, economists and banking experts and wizards of all flavors can wax eloquently and ponder and propose all sorts of plans, processes and procedures. But the bottom line is no one knows if anything can truly fix the problems in the market.

Can we even define “fix”?

What does a “fixed” foreclosure market look like? Does that mean that there are no homes in foreclosure? (That never has happened and is just a wee bit unrealistic). Do we defined “fixed” to mean every man, woman and child that wants a “piece of the American Dream” becomes a homeowner? While that ideal may sound nice and work in some place just this side of Nirvana, the reality is that homeownership is not a right, it is a privilege that is earned – and not everyone will earn it (or even want it).

Is “fixed” some certain level of foreclosure inventory? If so, what is that number and who decides it?

What most people want appears to be some sort of normalcy in the real estate market – a balanced or neutral market that is neither completely lopsided on the buy or sell side with gradual home value appreciation. 

I contend that the government needs to step aside and quit trying to influence market dynamics. Clearly, foreclosure is not fun for those facing it. Watching your home decrease in value is hardly anyone’s idea of a good time. But the belief that home value only goes up and that banks and lawyers and politicians can legislate fundamental change in economic law needs a reality check.

They can’t. All they can do is muck things up. We may see short term “fixes” and glimpses of a sunshiny day, but real change in the market will only come with allowing market forces and dynamics to play out.

There is another economic law – the Law of Unintended Consequences. It states, “that actions of people—and especially of government—always have effects that are unanticipated or unintended.”

Yes, some unanticipated or unintended effects can be good. But they can also be bad. Very bad. And the bottom line is, we don’t know what could happen.

I say let the economic laws and market dynamics play out. Let the market adjust. It will adjust. It always does. It may not adjust as quickly as we’d like, but adjust it will. That may mean more banks close, and some homebuilders cease to exist. It may mean more people will lose their homes, as sad as that is. But it is the only solution for the long-term health and stability of the real estate market.

Surely someone out there disagrees with me completely. And that’s OK. What do you think the government should do to fix the “foreclosure crisis”?

Photo credit:  Courtesy of the ubiquitous Jeff Turner, aka respres, on Flickr. Under a Creative Commons License.

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Thinking about going to the Inman Real Estate Connect Conference in San Francisco in August? (If you’re not, and you are in real estate, you should be.)

Want to save over 50% on the conference registration?

Well of course you do.

Here’s your chance. Just click on the graphic in this post (or click here) and sign yourself up! Be sure to go through these links, and enter the code “PhoenixREGuy” to get your discount. Hurry, this greatly discounted price is only good through June 12 EXTENDED TO JUNE 19!. EXTENDED INDEFINITELY!!!

Why would you want to go to Inman Connect?

Well to meet me and hang out in cool San Francisco bars and restaurants. What other excuse do you need?

Why that may would indeed be fun, there are far more important reasons to attend Real Estate Connect.

It’s a  fact that Connect may just be the single best real estate conference for networking. I’ve got a stack of business cards literally 4 inches tall from the people I’ve met at three previous Connect events I’ve attended. From agents, to geeky developer types, to CEOs of real estate tech companies. We’re talking smart, very well connected people. And they are fun to hang out with.

Don’t want to meet a whole bunch of people that can change the way you do business? (Whatever.) Then how about conference sessions that cover everything from technology to branding to the MLS to brokerage breakouts, and more. Much more. You can attend a workshop session on blogging, internet marketing or technology (sure to be a geek fest). Want to hear from branding visionary Alfred Lin, Chairman, COO & CFO, Zappos.com? How about Craig Newmark, Founder of that little site known as CraigsList?

Be sure to go a day early (August 4) and hit up the second incarnation of RE Bar Camp San Francisco to be held at the Headquarters of Trulia! (The whole RE Bar Camp “movement” started in San Fran last year prior to Inman). You can RSVP here for RE Bar camp, and see who is coming here.

Here’s your chance to do all that, and more, for less than half the regular cost.

Oh, and the after-hour parties are epic.

NOTE: Special pricing is available for new registrations only. Inman is not able to issue refunds to those who have already registered and might have paid a different price. Sorry!

Disclosure: This discount is an “affiliate” program. I get a small payment if you click through and register. Trust me, it’s nowhere near the amount you save. I combine it with other affiliate programs and donate half of all funds collected to charity.

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Caller: Yeah, I need some information on your listing at 123 Main Street.

Me: We don’t have a listing at 123 Main Street.

Caller: Sure you do, I’m looking at a print out from your web site.

Me: Our site shows ALL the homes listed for sale in the Phoenix area, not just our listings.

Caller: Really? Uhm, well, can you tell me the lockbox code for 123 Main Street?

[OK, home buyers and sellers don’t call asking for lockbox codes. I know the answer to this next question…]

Me: Are you working with an agent?

Caller: I am an agent. I’m with a client and he gave me this printout from your web site. And it doesn’t have the lockbox code.

Me: You’re an agent? Lockbox codes aren’t shown on public listings, for obvious reasons. Did you look up the listing in the MLS?

Caller: Uhm no, I just have the printout from my client. We’re in front of the property trying to get in.

[About this time I’m thinking, “Wow, you are an idiot”. But wait….]

Me: Well, is there a for sale sign at the property?

Caller: Yeah, it says it’s listed by John Doe at (insert brokerage name here).

Me: Well, I’m not John Doe, and I’m not with (insert brokerage name here).

Caller: Oh. Well why is this listing on your web site?

Me:  We have an IDX on our web site. It has all the listings on it. See at the bottom of the printout where it says, “Listing provided courtesy of (insert brokerage name here)?

Caller: An ID what? I really just need the lockbox code.

Me: You’ll need to call the listing agent, or look it up in the MLS.

Caller: Can you give me the listing agents number?

Me: It’s on the for sale sign.

Caller: Oh. Yeah. OK, I’ll call him.

Nine times out of ten, the phone will ring about 30 seconds later. That call typically follows this pattern.

Caller: Hey, I just called you. And uhm, the guy on the sign didn’t answer the phone. So I was wondering if you could look up the lockbox code for me?

[About this time I’m thinking, “Why do you expect me to do your job for you?” and more importantly, “I wonder what your client sitting in the front seat of your car is thinking right about now?”]

Me: I really don’t have time to look up a listing for you in the MLS. You should have done that before you went out showing homes.

Caller: Well, I had this printout, so I thought we were good.

Me: But the printout is from my site, not the MLS. It doesn’t have showing instructions, or the listing agents phone number, or whether the home is occupied, or if you need an appointment to show, or if there is an activated alarm, or maybe pet instructions. You know, that sort of thing.

Caller: Oh. Uhm, I really just need the lockbox code.

Me: You’ll have to call the listing agent, or look it up in the MLS.

Caller: But I’m in front of the house, and the listing agent isn’t calling me back.

Me: Well, I suggest you move on to the next home.

Caller: But all I’ve got on that is a printout from your site…

—–

Seriously folks, I’m not making this up. We get calls like this all the time. It’s mind-boggling. It ranks right up there with the people that come to our site to search for homes and in the box that says, “How you found us:” they put “my agent sent me here”.

I don’t get it.

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