Virtual Properties

I'm giving a talk at September's RealTrends Marketing & Technology Expo. The topic is "Keeping Them Connected" Doniece asked for a "couple of sentences" on my presentation. Here it is:

TPFKATA. Customers, as Jeff Jarvis's "Dell hell" demonstrates, are perfectly capable of sharing their service experiences in effective ways. My talk will discuss how empowered customers have substantially raised service expectations in the real estate space and how we can exceed their wants and desires [Deming].

Sandra Fleishman:

The FTC charged that the 5,000-member Austin Board of Realtors violated antitrust laws by "effectively blocking" sellers who listed with discount brokers from marketing their homes on Web sites associated with the board, including Realtor.com, a national site.

Discount brokers offer fewer services than traditional firms and charge less. The Austin policy "denies sellers low-cost options and forces them to pay for services they may not want," said Jeffrey Schmidt, director of the FTC's Bureau of Competition.

Regulators said the Texas group consented to drop the practice and settled the case without admitting wrongdoing. The Austin Board of Realtors said in a statement that it dropped its rule last year and that the FTC misrepresented its aim.

• Consent Agreement
• Decision and Order
• Complaint
• Analysis
• News Release
• FTC Real Estate Competition Website

Barry Ritholtz:

"In 2003, of all new mortgages, 10.2 percent were interest-only, meaning the homeowner paid only the interest for the initial period of the loan. According to Loan Performance, a research firm, 26.7 percent of all loans were interest-only last year and another 15.3 percent were payment-option adjustable rate mortgages, which allow homeowners to choose how much they paid each month."

The problem is more concentrated in some regions: "In most California cities, as well as in Denver, Washington, Phoenix and Seattle, interest-only loans represented 40 percent or more of all mortgages issued in 2005."

Reuters:

The permanent ban, pushed by Senate Banking Committee Chairman Richard Shelby, an Alabama Republican, was attached to a fiscal 2007 bill funding transportation and housing programs as well as the Treasury Department.

It is unclear when the legislation will be considered by the full Senate.

The National Association of Realtors (NAR) has been pressing the issue on Capitol Hill for months following letters issued by the U.S. Office of the Comptroller of the Currency (OCC) that let two banks make real estate investments that involved hotels and a third to develop and partially own a wind-energy project.

Ad Age:

ABC's streaming-video experiment earlier this year on ABC.com will become a real offering in October, according to Anne Sweeney, Disney Co. co-chair-media networks and president of Disney-ABC TV. The network said the experiment was a success for advertisers given that research showed users had 87% recall of the advertisers involved. (Average recall of advertising on TV is about 24%.) Each program that was streamed was supported by a single advertiser.

John Cook:

he financing – led by Boston-based Par Capital Management and including funds from Benchmark Capital and Technology Crossover Ventures – comes just nine months after Zillow raised $26 million. And it brings total financing in the 19-month-old company to $57 million, making it one of the most heavily-funded consumer-Internet startups to emerge in the past two years. Asked why the provider of online home valuations needed more money, Chief Financial Officer Spencer Rascoff simply said, "We have big ambitions."

How big?

Rascoff readily admits that the company, which offers valuations on about 67 million homes, wants to create the most popular real estate Web site.

Jon Birger:

Michigan Gov. Jennifer Granholm has come out against a state bill that would make Michigan the tenth state to outlaw discounted, no-frills real estate brokerages, Fortune has learned.

The bill, which has already passed in the Michigan House, would impose so-called "minimum-service requirements" on all real estate agents in the state.

As with bills passed in nine other states including Texas and Illinois, the Michigan bill is being pushed by the state's powerful Realtor trade group and would effectively force all agents to provide full service. Some discounters would otherwise be willing to offer limited services and charge home sellers much less than the traditional 6-percent commission.

Elizabeth Boyd, an aide to Michigan Gov. Jennifer Granholm, wouldn't promise a veto - "we try to stay away from the 'V' word," she said. But Boyd did make her boss's position clear. "We do not believe the legislation is needed," she said. "It forces consumers to purchase services they neither want nor need."

Subcommittee on Housing and Community Opportunity:

Opening Statement of Full Committee Chairman Michael G. Oxley
Prepared Testimony:	Mr. J. Bruce McDonald, Deputy Assistant Attorney General, Antitrust Division, Department of Justice
	Ms. Maureen K. Ohlhausen, Director, Office of Policy Planning, Federal Trade Commission
	Mr. David G. Wood, Director, Financial Markets and Community Investment, Government Accountability Office
	Mr. Stephen Brobeck, Executive Director, Consumer Federation of America
	Mr. Aaron Farmer, Broker/Realtor, Texas Discount Realty, Austin, TX
	Ms. Kimberly Gorsuch-Bradbury, Senior Vice President, Real Estate Networks, LendingTree, LLC, Charlotte, NC
	Mr. Glenn Kelman, President and CEO, Redfin Corporation, Seattle, WA
	Mr. Geoffrey D. Lewis, Senior Vice President/Chief Legal Officer, RE/MAX International, Inc., Greenwood Village, CO
	Ms. Pat Vredevoogd-Combs, 2006 President-Elect, National Association of Realtors

Dead 2.0; Funding the Web 2.0 Gravy Train:

And Jobster is just one of several starting to climb up the over-valuation ladder, as we saw Zillow pick up another $25 million recently (total valuation? over $50mil!). Granted they are doing well with traffic (and, as Brad Feld comically pointed out to me in an email “I do think it’s entertaining that they are both in Seattle.”), but with over 100 employees to feed every month, that cash is getting spent! I can’t help but feel that it’s the push to the higher valuations (which are probably caused in part by the MySpace acquisition and FaceBook’s ridiculous decision to turn down ~$800 million, a.k.a, the last offer they will probably get) that will accelerate Mark Evans’ prediction for the coming bust 2.0.

OnPoint:

It seemed like a good idea at the time. Just a few years back, when housing prices were soaring and interest rates were at historic lows, millions of Americans grabbed adjustable rate mortgages with super bargain basement rates. For many, it was the only way to jump on the American housing train.

Now that train is slowing, big-time. Home sales and prices are slumping in many markets. Interest rates are up and so are foreclosures, as the first big wave of adjustable rate mortgage holders face the music: sharply higher monthly payments or a scramble to refinance and push out the pain as housing prices stall.