Monday, December 12, 2005

Letters to the Editor, an Apology, and a Question

Well, there are a couple of letters to the editor in the Marin IJ in response to this write up of my blog (scroll down about half way to read the letters). I am going to keep my mouth shut this time (and my keyboard idle) and see what my readers have to say.

Please post your thoughts.
* * *
However, I will say this before shutting up: I would like to publically apologize to anyone who was offended by my comments about realtors. I am sorry and please accept my apologies. I was too cavalier with my words. I know there are many honest realtors out there, many of them in Marin. I was wrong and I admit it.

It all started like this: I was just having an email exchange with the reporter who said she was interested in exploring who I am and why I decided to do the blog on Marin County real estate. I thought she was just gathering background information about me and my motivation for writing a blog about Marin real estate and I was never made aware that what I was writing could (and would) get quoted without my permission. I was expecting her to write at some point "ok, from this point forward anything you say might be quoted in an article" but such a statement never arrived. The email exchange made it sound like my blog would only get mentioned in passing in some larger article rather than actually being the subject of an article. At no time was I asked for my permission to be quoted. In fact, during the email exchange the reporter made it abundantly clear that she could not go ahead with writing about my blog without me first identifying myself. As I never did identify myself, I concluded that my blog would not get written up in an IJ article nor my words quoted in an article.

This does not excuse my behavior, but it is relevant for understanding the context of the exchange. Again, I apologize to anyone who was offended.
* * *
It's the end of the year and I am wondering whether I should continue with this blog. Although I have received no negative email from anyone, the comments from the realtors in the letters to the editor mentioned above have in truth rattled me a little. On the other hand, I have received a tremendous amount of support for this blog. For example, here are some comments people have sent me: "right on brother!", "Thank you for creating your website", "Good Job!", "Great service to us all, Thank you so much, you are a god!", "I love your site...you're the Che of the Marin housing blogs!", "Thanks for creating such a great blog!", "keep up the good work" to list a few.

Please post your thoughts.

26 Comments:

Blogger John Doe said...

Dear Marinite,

While you may feel remorse for your attacks on Realtors, you must realize that while your words were harsh you are also being attacked. Your anonymity is your right, they are clearly wrong for attacking that. Voicing unpopular opinion is exactly what anonymity allows us to do.

In years past, authors often used pseudonyms to mask their identities because of their heritage, sex, or political viewpoints. Your viewpoint is patently unpopular not only in your area, but in California as well, and a direct attack on their business. It would be foolish and naiive to believe that your shot across the bow would not elicit a response from the highest. The very fact that they responded shows how much you got under their skin. If it were so stupid, vicious, and slanderous, why would the journal write it? Wouldn't their editor have been a bit more discerning if it weren't newsworthy?

But, while you may have made some remarks that are sensational, they are no less sensational than their flash-in-the pan mentality is. While one of the letters doubts your commitment to selling your home for 50% less than market value, I very highly doubt that any one of them would attempt to convince a "fringe" buyer who intends to hold and flip to not purchase when they know full well that they will capture 3% on the buy and 3% on the sell... they have children to feed as well. I also doubt that they would reduce their commission willingly to give a break to first time homebuyers. They would defend it all with "it's a free market". Well, it's a free blogosphere too.

Their attack is all shock and awe... but it is an important lesson to learn in life; anonymity is something that money cannot buy, treasure it as if it were great riches.

As far as their remarks go, remember, their remarks are well thought out and carry with them many years of anti real estate countering experience. They can easily manipulate perceptions with a few words to refocus blame on other candidates. Anyone who believes that markets are not psychology driven are either fools or trying to sell you something. (perhaps a home?)

While I respect many seasoned real estate professional, it is clear that the bar has been lowered to let any Tom, Dick, or Harry in. If the CAR is so interested in their public perception, why don't they willingly submit to investment advice guidlines that investment advisors must? Newspapers willingly print articles with predictions from Realtors(tm) that "you had better buy now or you'll be forever priced out!" and the assorted fear mongering that many of the newbie Realtors(tm) spout. They deserve no leniency when they drive hardworking Americans into indentured servitude to make a quick 3% buck.

Respectfully,
John Doe.

BTW, if you quit, you will have done exactly what those authors set out to do; shock and awe intimidation.

Dec 12, 2005, 9:47:00 PM  
Anonymous Doc said...

Hear, hear!

Dec 12, 2005, 10:54:00 PM  
Anonymous caddis said...

Jack's just a salesman who's trying to stop the impending bust of the market. Does George W. come out and say he f-up? No...he's a salesman too. We all have our thoughts and ideas of what is about to happen.
If your business was going to drop 30-50% over the next five years you'd be screaming too.

Keep up the good work.

Caddis

Dec 12, 2005, 11:05:00 PM  
Anonymous Anonymous said...

These realtors are patently manipulative particularly in this "unreal" estate market they call Marin...just that now the "real estate can only go up" mentality has spread across the nation. Do NOT stop this blog...it is inevitable that this market will collapse and some of us need a place to sober up between now and then.

Dec 12, 2005, 11:31:00 PM  
Blogger sf jack said...

I have an issue with the IJ since the author said she could not go ahead with the story without your identity.

Apparently, to sell a few papers, she or her editor saw your comments as fair game when their incendiary nature (towards realtors(tm)) became apparent.

"BTW, if you quit, you will have done exactly what those authors set out to do; shock and awe intimidation."

I really agree with JD's statement above.

As for Jack Mc's:

"$600,000 of financing available today for developers of affordable housing in the county."

Who is he kidding? That might buy one a garage somewhere in southern Marin. Or a small outhouse in Ross. "$600,000" - is that all the Marin realtors can come up with? There are ski/resort towns all over the mountain west of America with better funding of "financing for developers" of affordable housing.

And I think I can see why Mr. Taylor is upset - you said some things taken to be as slanderous. I can understand that (albeit the statements were given as if "off the record" or not for quotation).

At the same time, in typical realtorspeak(c) fashion (with regard to "distortion"), Taylor talks about how "they're not making any more real estate in the Bay Area" and how there's a more "balanced market".

While the first remark may be true, Mr. Taylor must certainly realize that the psychology of supply and demand plays a much greater role than the actual amount of real estate available (see residential real estate, Tokyo, 1990 to present), especially so when part of the "demand" is created in part by realtorspeak(c), ie., distortions (it is true that Marin may not have much more real estate than it did, say five years ago, but the larger story is that most recently it had greater demand driven by low interest rates and coincident realtorspeak(c)).

As to the other comment on "balance" in the market - it's anything but balanced - and figures over the next several years will likely bear this out.

I suppose it's truly no wonder realtors(tm) get a bad rap around here.

Dec 12, 2005, 11:32:00 PM  
Blogger sf jack said...

And Caddis is right:

"If your business was going to drop 30-50% over the next five years you'd be screaming too.

Keep up the good work."

Dec 12, 2005, 11:37:00 PM  
Blogger ocrenter said...

I've been online long enough to spot the tricks of winning an argument when one has no position to make any: find a single line of over-the-top generalized careless statement from your opponent and attack it like it was blasphemy.

The realtors could find no wrong about your blog, Marinite. Everything here is reality. Home prices ARE slowly killing off a community, the schools are dying, and people are suffering. You pointed out the obvious that so few in the media were willing to ackowledge.

So what did they do? They found your quote about them. They found their one over-the-top and generalizing statement and they attacked, as predicted. And let's be honest, it was a stupid statement. But how many of us make stupid statements in e-mails? Now honestly, had you known that such statement would end up as a quote in an article realtor sharks would be eager to find fault with, would you have made that statement?

I do find it laughable that all they could come up with about their assistance with housing affordability is $600,000. What can you buy with $600,000 these days? Check out your POS blog and I think we have an answer for them.

Keep this thing going, if you haven't noticied, New York Times and BusinessWeek both now have blogs with links to yours and mine blog. Don't let a little regional paper get you down... there's a reason someone is writing for the Marin IJ instead of the SF Chronicle.

Dec 13, 2005, 4:10:00 AM  
Blogger bubble skeptic said...

Dear Marinite,

Thanks for your site. It is the only intelligent window on the Bay area housing market I've been able to find online.

Maintaining a high quality site like yours must be a lot of work, and no one should begrudge you if you decided your effort wasn't worth the benefit to you. However, I think it would be a mistake to quit because of some comments from realtors.

I agree with you that your comments about realtors was probably a bit harsh. I think the Federal Reserve's ultra-low interest rate policy combined with the desirabilty of living in the Bay area and land use restrictions has created a problem that realtors have exacerbated.

Nevertheless, I can sympathize with your sentiments. Realtors, as a group, tend to be bullish on home prices. This attitude undermines their own credibility, and is a disservice to their buyers.

But, look at what value you are providing your readers. Housing statistics, e.g., price/rent, price to median income and other data have been hard to find prior to the internet and blogging. I think your site has the potential to save home buyers hundreds of thousands of dollars, if they have the patience to wait for lower prices.

Home buyers used to have to rely on their gut and the often pollyanaish advice of their realtor when considering the investment merits of a home purchase. You are providing a valuable alternative: facts and data. I think this is one of the reasons many realtors are so hysterical about your site.

Keep up the good work. You are bringing reason and logic to the home buying decision-making process.

Dec 13, 2005, 4:48:00 AM  
Anonymous Charlie in DC said...

Marinite -

Don't let a little criticism get you down. You've got a worthy blog, so people are paying attention to it.

The merits of whether Realtors(tm) are drinking the blood of your children are neither here nor there. The roll of the die has been good for them up to now, and they've taken advantage of a good market opportunity. Bully for them.

But bully for you, too, for simply pointing out how nutty the situation is. It's rather tragic that it costs so much to live next to San Francisco. It's even more tragic that we've become so venal about our $750K garages, as if living in an expensive PoS makes us more important and worthy than a family living in (much) better housing that only costs $250K.

Don't quit. The Emperor may have clothes, but they're looking a little threadbare.

Dec 13, 2005, 5:12:00 AM  
Anonymous Anonymous said...

Marinite - I just discovered your site and find it bloody brilliant. I haven't laughed this hard in a long time.

Dec 13, 2005, 5:42:00 AM  
Anonymous Anonymous said...

These realtors should be thankful for your services. With your objective data, graphs, and statistics, realtors could help their seller clients to set more realistic pricing targets. They should pay you a fee for every house they sell in a down market.

Dec 13, 2005, 6:16:00 AM  
Anonymous Professor said...

I see no justification for an apology. I started in the real estate business in 1972. My father was a real estate developer for years ('50s through the '80s). I've witnessed the cyclic nature of this business. Obvious truth is we are headed in the downward direction of this cycle and I anticipate that this is going to be a long ride down. That is simply because is has been a long ride up. The market should have started its downward direction in 2002. It didn't because of the low interest rates and the failure of lenders to recognize their responsibility to protect the interests of their depositors by making prudent lending decisions.

I'm just thankful I'm out of the real estate investment business (currently) and into investing in precious metals. Will I return to real estate? You bet. It is simply a waiting game to determine when we have arrived at the bottom of the cycle.

Dec 13, 2005, 6:54:00 AM  
Anonymous Anonymous said...

Follow up on Professor's comments. There is an article written by Marc Faber posted on the Financial Sense web site.

http://www.financialsense.com/editorials/faber/2005/1212.html

Mr. Faber is a seasoned mutual fund manager.

In his article, Figure 1 points out the total credit market debt as % of US GDP and it is shocking. Figure 2,shows the sharp decline of US purchasing power.

There is no coincident here. The US is so much in debt as a nation and as its citizens and it has caused the US dollars to slide quite a bit last 2 years. As a result, this country's purchasing power diminishes rapidly and inflation soars.

In order to fend off the US dollar, the Fed has no choice but to raise interest rate. Otherwise, the US dollar will slide further and inflation will skyrocket. We are at the beginning of this vicious cycle. Anyone got gold?

Dec 13, 2005, 8:34:00 AM  
Blogger David said...

We all say things we later regret.

1) Aplogize. Done

2) Be more careful next time with what you say. Especially when talking to a reporter

3) Continue to blog. Your blog rocks. It is valuable. The harm that this bubble has caused is gathering. Your work on the subject contributes to the increased awareness of this speculative episode.

David
Bubble Meter Blog

Dec 13, 2005, 8:52:00 AM  
Blogger marin_explorer said...

As the reporter wrote: "The anonymity rankles a lot of people, too." Well, whatever. If she chooses to be rankled, that's her option. A newspaper has no authority to demand your identity.

The way I see it, your blog basically centralizes information that is available to the public already; you shouldn't need to personally face realtors, reporters, or anyone else. It's not about you, but providing pertinent sources of information on the local real estate scene. If the reporters or realtors would like to put up their own blog, they're free to do so.

This blog has proven very useful. Even if it has "rankled" a select group, it should continue, even if you elect to stop. In that case, I would take up the torch after you.

Dec 13, 2005, 9:16:00 AM  
Anonymous by_palladium said...

I just went to the IJs site to attempt to read the said article. Too bad that they don't have links - at least, that I could find. What they do have is a lot of real estate adds. It makes sense, RE advertising is a huge portion of their income - look how many of their paying constituents would be offended by an anti-RE article.

Come to think of it, there really isn't much of an economy in the SUBURB known as marin except real estate. I have no figures, but RE and related activities must be one of the largest sectors in the county - next to the public sector.

Please keep blogging on the POS blog and this one. It keeps the rational renters like my family on the only sane financial course.

Dec 13, 2005, 9:25:00 AM  
Anonymous Anonymous said...

If you want to hear a truly irresponsible comment, you need go no further than Mary Southall's Q&A column in last Sunday's Marin IJ real estate section. Asked by a reader about the real estate bubble, Mary responded that we've returned to a market that is a "great place for buyers." She wrapped up her column with this advice: "Economists predict that interest rates will continue to edge upward. So buyers, what are you waiting for? If you missed the boat for the abnormally low rates of the last few years, you can still get a normal rate now. Jump on it before rates go higher."

Now, Mary doesn't appear to be a real estate agent, but she does own commercial and rental real estate, so she's got a stake in this fire. Hers is the same "advice" peddled by many (but not all) real estate agents in Marin. How can she responsibly encourage buyers to take advantage of low interest rates without a prudent discussion of a possible correction in housing prices? If prices continue to fall as now appears likely, many new homeowners -- especially those in interest-only, adjustable rate, 100% LTV loans -- are going to be in unhappy situations. Real estate agents won't be held accountable for their part in the tragedy. How is it that they can say things that a stockbroker would lose his job over?

In the months to come, real esate agents will predictably talk about "soft landings" and "buying opportunities." They'll use statistics to suit their preferred outcome: prices might be falling, but we're still up 14.8% for the year! They'll tell buyers to "jump on it" before rates go higher/inventory goes down/prices go up. But anyone who has ever read an economics textbook or can remember the stock market collapse of 2001 will (hopefully) know better and see through the realtor spin.

The housing boom has been a great ride for the real estate agents. Using Jack McLaughlin's own sales data and a 5% commission rate, one can determine that Marin County realtors have already raked in over $35 million in commissions this year alone. Have no pity for the realtors, dear Marinite!

Dec 13, 2005, 9:49:00 AM  
Anonymous Anonymous said...

anon above has geat commentary. How much reckless realtorspeak can be found in the IJ in the last 1, 2, 5 years???
Keep blogging. Moreover, I say keep trying to publicize in IJ (letters, etc.), with the wary eye of the recent experience wide open.

Dec 13, 2005, 10:05:00 AM  
Anonymous Anonymous said...

1. Jack McLaughlin wrote that the realtors donated $300k *not* $600k for low-income housing; the other $300k came from matching government funds. This is an infinitesimally small contribution compared to the total real estate commissions generated in Marin.

2. Today, with Internet services, you can pretty easily find out how much a car costs an auto dealership, and shop around the price you want to pay for a car. The same level of openness with sales information is not true in real estate. A prime example is where companies show list price over selling price almost always close to 100%, neglecting to include the fact, for example, that the house price was dropped 3 times before the final "list price" was used in this percentage calculation (hello, West Bay Real Estate). Or showing past sales on their web site using the original listing price and not the price they sold the property for (hello, Decker Bullock). I don't have any problem with real estate agents making their commission, but I think all buyers should be able to easily access the *real* pricing history for a property and not have to compare price to "comparables" where the statistics are manipulated in the favor of the real estate broker.

There is no transparency of data in real estate today.

3. Why are increasing housing prices so sacrosanct? This weblog provides a valuable counter perspective to increasing real estate prices in Marin. I think it is great if Jack McLaughlin and others disagree with the opinions of this weblog. Asking you not to express you opinion that Marin real estate is in a housing price bubble is ridiculous, though.

Keep up the good work, this weblog is invaluable.

Dec 13, 2005, 10:42:00 AM  
Blogger coitdeck said...

Real estate agents are salespeople. Agents are not going to list for you the possible negatives of buying a given property or taking on a risky loan. When an agent sends you over to their friendly mortgage broker, who sets you up with an interest only adjustable loan . . .is that completely 'honest'? You tell me.

Dec 13, 2005, 11:03:00 AM  
Anonymous Anonymous said...

"Real estate agents are salespeople."

I expect real estate agents to downplay the lack of storage or parking when trying to sell me a particular house. That's sales. But when a real estate agent encourages me to invest my money in a house based on the direction of interest rates or on the past performance of an asset class that, he or she assures me, is only going to continue to rise in value, we are no longer in sales territory. My point is that real estate agents too often give financial advice. In that case, they should be regulated and licensed like financial advisers are by the SEC. A company selling a money market fund couldn't trump up sales data like the real estate agents do. They'd be out of business faster than you can say "past performance is not an indicator of future returns."

Dec 13, 2005, 11:28:00 AM  
Anonymous Anonymous said...

I have been a realtor for 25 years and I will be around another 25 years. With that said I fully understand that all realtors should be scared,make that very scared about what is coming in the next wave, which will be decidedly down. The good part of the downturn will be less realtors. The "Hey I just spent 40 hours to become a RE agent and I am ready to counsel people on their most important financial decision" crowd is going away slowly, but they will drop off like fies soon. The bad part is that all realtors incomes will be coming down. I am prepared for that and will ride out the storm, which will re-shape the industry. The realtors that are yelling and screaming are fringe players and go into the game to late in the boom cycle. To them I say. To them I say Bye Bye and don't let the overpriced door hit you on the way to Wal-Mart

Dec 13, 2005, 11:50:00 AM  
Anonymous Anonymous said...

O love your Blog. I discovered it about a week ago and put it on my toolbar. It;s the first thing I look at every morning and I check in with it all day while I'm working. Don't let the realtors get you down.I agree with the realtor who posted just ahead of me, that many of the people "selling" today most likely have no business doing so. They're in it for no other reason than tomake a quick buck, such as many of the "financial counselors" during the dot com days. Those that knew their stuff were the ones that lasted, the opportunists fell out with the crash.
As to giving interviews, take it from me.. I've been interviewed plenty...ANYTHING and I mean ANYTHING said to a reporter can get used. I've learned to watch my step after having given my share of embarassing statements to the press over the years. They love to paint with a broad brush. You're doiung a great service..and hey how about extending your reach and including Sonoma in your blog too.

Dec 13, 2005, 12:25:00 PM  
Blogger fredtobik said...

I would not have apologized. Your statements only echo what most people think. I remember when RE agents were soccer moms that had nothing to do after their kids went to college. Now it has turned into the latest get rich quick scheme. The negative perception is brought on by themselves and their reluctance to internally police or raise standards for their “profession”.

Stop blogging? Hardly, in fact I would call up the reserves and start a war with RE agents.

Have you heard how they treat houses that are being sold using a web service?

Dec 13, 2005, 1:34:00 PM  
Anonymous Anonymous said...

Your blog provides a channel for most frustrating home buyers who are amazed at the crazy market. Yes there are some people with deep pockets or options who could pay $2 million cash for a house in Marin. (I believe there are a few of them.) However, most people have to work for a living and the income could not catch up with the rapid rise of home prices. They are priced out.

If this phenomenon continues the way it is, we will have some serious social implications. Anyone who does not care about this issue or attack you for bringing this up, he or she does not have any social conscience.

Dec 13, 2005, 1:47:00 PM  
Anonymous Anonymous said...

Wow. Some great responses. I agree with much that has been said in favor of this blog. Sure, your comment about the realtors was a little over the top. Realtors are just an " oil-additive" for the "engine"of speculation-- not the driving force. The authenticity of your postings is a welcome fresh breath of air. You apologized. Nuff said. Strive to be more careful and keep blogging.
I would also add look at who the IJ serves--lot's of realtor advertisements in there!
PS: Is McLaughlin joking? 600K donated? Come on, is that all the game you got?

Dec 14, 2005, 10:51:00 AM  

Post a Comment

Links to this post:

Create a Link

<< Home

Terms of Use: The purpose of the Marin Real Estate Bubble weblog (located at URL http://marinrealestatebubble.blogspot.com/ and henceforth referred to as “MREB” or “this site”) is to present and discuss information relating to real estate and the real estate industry in general (locally, state-wide, nationally, and internationally) as it pertains to the thesis that recent real estate related activity is properly characterized as a “speculative mania” or a “bubble”. MREB is a non-profit, community site that depends on community participation and feedback. While MREB administrators do strive to confirm all information presented here and qualify all doubtful items, the information presented at MREB is neither definitive nor should it be construed as professional advice. All information published on MREB is provided “as is” without warranty of any kind and the administrators of this site shall not be liable for any direct or indirect damages arising out of use of this site. This site is moderated by MREB administrators and the MREB administrators reserve the right to edit, remove, or refuse postings that are off-topic, defamatory, libelous, offensive, or otherwise deemed inappropriate by MREB administrators. You should consult a finance professional before making any decisions based on information found on this site.

The contributors to this site may, from time to time, hold short (or long) positions in mentioned and related companies.