Virtual Properties

Kristin Joys discusses the high prices in Oslo, Norway, where she is a real estate agent. Joys talks about how expensive everything is and how locals deal with the high cost of living. Oslo overtook Tokyo this week as the most expensive city in the world, according to the Economist Intelligence Unit.

James Hagerty:

In the closing weeks of 2005, Chang-Tai Hsieh received nearly a dozen calendars and refrigerator magnets from real-estate agents eager to represent him the next time he buys or sells a home. Just before Halloween, two agents left pumpkins on his doorstep.

Mr. Hsieh, an associate professor of economics at the University of California, Berkeley, thinks all this free stuff helps explain what's wrong with America's real-estate brokerage business: Rather than competing on the price of their services, agents tend to spend heavily on marketing gimmicks -- and pass that cost to the consumer.

As home prices soared in recent years, so did the percentage-based commissions charged by agents. Residential real-estate commissions in the U.S. totaled $61 billion in 2004, up 42% from 2000, estimates Real Trends, an industry publication. That's bad news for people who buy or sell homes. But isn't this trend at least making Realtors happy?

NPR, more from curbed

Ellen Florian Katz:

But it's his track record more than his resume that has won him serious credibility with his peers. In 1989 he earned the nickname "Scary Gary" by correctly predicting that the housing market in Southern California was headed for a tumble. Then, in 1996, he was one of the first to call the area's rebound. Since 1997, Orange County home prices have seen a 195 percent rise. Will the good times last another year? Gary doesn't hesitate. "Fifteen percent is pretty much in the bag for Orange County in 2006," he says. "It's impossible for prices to go down this year."

Head 3,000 miles east and talk to almost any broker in Boston, by contrast, and he'll tell you that business has slowed in the past several months. Consider John Ford. Just two years ago, five properties was the most he needed to show a prospective buyer before eliciting an offer. "And then it would be a bidding war," says Ford, who employs 30 agents in three Boston area offices. Today he's averaging 14 property tours before a skittish client is ready to buy.

Leslie Walker:

When I saw a demo of the Zillow.com real estate service last month, it struck me as so obvious I wondered why no one had done it before.

Then when Zillow launched on the Web last week, I realized why.

Offering automated property valuations via the Internet turns out to be much harder than it seems -- especially if you expect them to be accurate. But after running extensive tests on this ambitious national real estate service, I found it to be so inaccurate that it's not useful.

The essential problem is that land records and assessment data differs across communities, counties and states. In addition, the data is updated in an often irregular fashion.

TaxProf:

Reuters reports that President Bush on Friday rejected the idea of any change in the U.S. tax code that would eliminate the deduction for mortgage interest:During a question-and-answer session in Florida, Bush was urged by a home owner to make...

Rebecca Buckman:

Homestore Inc., an online real-estate company rocked by an accounting scandal several years ago, is changing its name and upgrading its services in a bid to attract more users and more advertising revenue.

The Westlake Village, Calif., company, buoyed by a recent $100 million investment from private-equity firm Elevation Partners, said it is changing its name to Move Inc. and will launch an overhauled Web site under the move.com name in the second quarter. That site will replace three Homestore sites -- Homestore.com, HomeBuilder.com and RentNet.com -- and offer a general-purpose search engine for finding homes, apartments and move-related services, company officials said.