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Tuesday, November 30, 2010

"Evelyn Harper, Realtor"

The Dean of
TV Realtors

I find Ty Burrell's charactor on "Modern Family" to be more believable ("Phil Dunphy, Realtor").

But for the record, easily the longest running TV realtor would be Evelyn Harper on "Two and a Half Men," played by the wonderful Holland Taylor (also Tom Hanks' boss on the show where he got his start, "Bosom Buddies").

While I don't know anyone in the business who reminds me of Evelyn, one episode actually did anticipate a real-life home Seller's nightmare: their Realtor using their vacant home for -- shall we say -- "trysts" (see, "Did real estate agent play while owner was away?" in the Star Trib this Summer).

On "Two and a Half Men," the guilty parties were Alan Harper and his girlfriend, and the situation was (predictably) treated humorously rather than as the felony it really is.

Realtor Refrain: 'Put it in Writing'

Realtor Broken Record

Like a lot of Listing Agents (representing Sellers) these days, I find myself sounding like a broken record.

As in the following:

"Would your client entertain a really low offer?"

"Put it in writing."

"Would your Seller consider an offer 30% below their asking price?"

"Put in writing."

"Would your client pay $10,000 in closing costs, replace the (functioning) furnace, and throw in the plasma TV in the den?"

"Put it in writing."

Probes and Posturing

If the Buyer's agent and their client won't even spend an hour putting together an actual, written offer, they're not very serious (or, they're simultaneously probing multiple Sellers to sniff out a truly desperate one).

It's also the case that it's NEVER a good idea for a Seller to negotiate with themselves.

Which is why the standard response to any question beginning with, "Would your client take . . .?" is, "I'm sure that they'd accept a full-price offer; anything else, I'll have to run by them once I've got it in writing."

Groupon's Sales Price: No Bargain?

Google is near a deal to acquire Groupon, the pioneering online discounter, for as much as $6 billion.

--The New York Times (11/30/2010)

There's got to be not a little irony in Groupon being bought out at something like 15x its annual revenues of $350 million.

By contrast, established consumer goods companies can sell for 2x-3x revenues.

Finding "The One"

Prelude to a Deal

Courting my wife in Manhattan in the late '90's, I remember my (quick) progression from "Friend," to "Special Friend," to "Boyfriend," to "fiance," to "husband."

(The only interim title that I really objected to was "Special Friend," which sounded vaguely insulting.)

Is there a similar progression in a real estate "courtship?"

Reading the Signs

Usually, there is.

To the Buyer's agent, something about the client's demeanor during the first showing will be a little different, more serious -- see, "Like (vs. Love) at First Sight."

Afterwards, the Buyer's Agent will typically appear on the Listing Agent's radar with some positive feedback and follow-up questions (see, "When Do You Tell the Seller?"), and to make sure no other offer is imminent.

The next step is typically a second showing, and, if the Buyer is contemplating major work, a third showing.

After that comes the offer and negotiation.

The "Fickle Factor"

Just like in real courtships, occasionally Buyers who look poised to make a deal suddenly flake out(?) and disappear.

At the other extreme, some lucky Sellers' homes will be swooped up by a Buyer who seemingly appears out of left field.

In general, however, most deals -- like relationships -- are characterized by a promising introduction, followed by steady, intensifying interest.

Realtor Dreams -- and Nightmares

Ticking Clocks and Cold Sweats

As an undergrad and Law School student, I would occasionally dream that I was hopelessly behind on an exam, with time running out (once, the exam was literally in an unrecognizable foreign language).

As a lawyer, that was replaced by a new, albeit infrequent nightmare: that I was months behind turning in my timesheets -- used to bill clients -- and that my records were nowhere to be found (imagine trying to account for every 10 minute increment of your 12 hour day, for weeks on end, months after the fact!).

So, now that I've been a Realtor for closing in on a decade, what gives me a night-time cold sweat?

Try, lapsed Inspection Contingencies.

The other night, I dreamt that my wife bought a new house without me, and neglected to do the Inspection in time (you waive the inspection if you don't perform it within the prescribed time period).

And no, that's never happened in real life, either to me personally or a client.

P.S.: For the life of me, I can't recall any CPA dreams -- my other vocation -- either good or bad.

Sunday, November 28, 2010

Realtor as Conduit -- and Filter

When Do You Tell the Seller?

The Buyer's Agent called you up after the first showing to say it went well, and to ask a few questions about the house's condition.

The second showing was yesterday.

Then, mid-afternoon today, the Buyer's Agent called to say that she is meeting with her client tonight to write an offer, and that she expects to have it to you tomorrow morning.


When do you tell your client, the Seller, that you're expecting an offer?

My answer (and most experienced Realtors'): never.

(Sorry, it was a trick question.)

Rather, the time to tell your client that you have an offer in hand for their home . . . is when you actually have an offer in hand for their home.

Managing Expectations

Which is not to say that my clients don't know what's going on -- they do.

Depending on their guidance and wishes, I'll typically relay showing feedback as I receive it, and give periodic reports about what's happening (or not) in the market around them.

But I've learned from experience that nothing's worse than calling an anxious, expectant client to alert them that an offer is imminent, then waiting.

And waiting.

A small percentage of the time, I suspect the other agent (or their client) of purposeful manipulation.

However, by far the more common scenario is that their clients cooled off on the home, warmed up on another, or simply got busy at work, home, etc. and couldn't find the 2-3 hours it takes to meet with their agent to formulate an intelligent offering price, then write a careful and thorough Purchase Agreement (add 50% for first-time Buyers).

As a Listing Agent, I'll certainly be in regular touch with the Buyer's Agent (and any other Buyer's agents who've expressed interest).

However, it 'ain't a real offer till I have it in hand.

P.S. As far as I'm concerned, it's not a done deal till my (Selling) client's proceeds check shows up on their bank statement!

2015 Housing Prediction

Advice to Prognosticators

I'm drafting my 2011 letter to clients now, which seems like a good time to recall this (anonymous) advice to prognosticators:

"The ideal time frame for predictions is 2-4 years out. That's immediate enough to compel people's interest, but distant enough that if you're wildly off the mark, no one will remember."

That may work for stock market or global warming predictions, but I doubt I can get away with that in my 2011 client letter.

Which leaves Plan B: simply extrapolate current conditions.

In fact, the vast majority of housing market predictions I've seen -- this year and in previous years -- do just that.

In the case of today's housing market, that means a continued soft market, characterized by skittish Buyers worried about their jobs and the risk of (further) home price declines.

Meanwhile, Sellers need to price and market aggressively to stand out from what is still a high inventory of homes for sale.

"We Bailed OURSELVES Out??"

"We" Minus the "Us"; or,
More Pronoun Confusion

The bailout and stimulus that we have administered to ourselves have left us without much cushion. There may be room, and even necessity, for a little more stimulus. But we have to get this moment right."

--Thomas Friedman, "Got to Get This Right"; The New York Times (11/27/2010)

I suppose if you're in London or Berlin or Beijing or wherever Thomas Friedman writes most of his dispatches, it looks like the United States bailed itself out.

However, here in Friedman's hometown of Minneapolis (actually, next-door St. Louis Park), the "we" he refers to looks decidedly more like a "them."

"Them," of course, being the same Wall Street actors whose reckless bets and insane leverage caused the mess in the first place.

It's hard to see how "we can get this moment right" if "we" can't even get our pronouns right.

Saturday, November 27, 2010

Selling Wall Street Journal Subscriptions Against My Will

City Lakes Real Estate Blog 2.0:
Due Early 2011

A capitalist will sell you the rope to hang him with.


I suppose the blogging equivalent of Lenin's famous line is, "a blogger whose ads are served by Google will end up promoting that which they denounce."

Which explains all The Wall Street Journal ads bracketing my last post (Google samples key words, and serves ads that appear to be related -- never mind the context).

Amongst other upgrades (Wordpress platform, "jumps," customizable format, etc.), the new-and-improved version of this blog will have better control over ad-serving.

Look for it in early 2011!

P.S.: Personally, I always thought that The Journal should charge for its (time-saving) annotations, and give away the unabridged articles. Instead, it's the other way around.

The Palin-ization of The Wall Street Journal

"Glister," Rupert? Really, "Glister?!?"

You knew that Sarah Palin was running (kind of) for President, but did you also know that she apparently is now publishing The Wall Street Journal?

How else do you explain:

--Headlines like this one, from Friday's paper: 'Behind Gold's New Glister: Miner's Big Bet on a Fund."

--A front page that now features both news leads and ad leads ("The Wall Street Journal's lower right front page . . . brought to you by AT&T").

--An Op-Ed page that, instead of showcasing the day's leading conservative ideas and voices, more often than not now serves as a house organ for Republican sophists and apparatchiks (not that the Left doesn't have its counterparts -- and then some).

Rupert Murdoch: Journalism Trailblazer

But back to "glister."

If you look hard enough, you'll actually find a dictionary that includes the noun version of "glister" as a permitted -- albeit archaic -- usage.

However, what it really seems to be is a mash-up of the words "glitter," "glisten" and "luster" -- much in the spirit of Sarah Palin's "refudiate" ("refute + repudiate").

Once upon a time, institutions like The Journal served as bulwarks against bastardizations of the English language and sloppy thinking, not necessarily in that order.

Now, apparently, The Journal has decided to become an abaser itself.

Ads, Ads, Ads

On to issue #2: ads.

Old-time advertisers -- and advertising policies -- were positively genteel compared to today's ubiquitous (and creepy/stealthy) commercialism and line-blurring.

So, instead of discreet segues like, "Now, a word from our commercial sponsors," you get a search window in the upper right corner of The Journal's online home page with this (very) faint disclosure: 'Search Sponsor: Goldman Sachs Asset Management.'

Apparently, it's not enough that Goldman Sachs and their Wall Street ilk are front-running everyone else's stock trades (through an arcane practice called "high frequency trading"); now, they're also front-running our online searches and very thoughts -- or at least, typed ones.

Which, ironically, might actually argue for subscribing to the anachronistic print version: at least when The Journal runs ads on its print home page, as it now does, it can't monitor what its readers are looking at.

Another Name for "House Organ?" How about "Tool"

Last item: the decline of The Wall Street Journal's Op-Ed page.

Once upon a time, The Journal's Op-Ed page was a must-read for political thinkers of all stripes.

It showcased writings not just by Milton Friedman, Peter Drucker, and Norman Podhoretz, but by icons and leading lights from all over the political spectrum.

Now, it largely serves as a forum for . . . . political hacks and second-rate thinkers like Michael Boskin, my old economics Professor at Stanford, who went on to become Chair of the Council of Economic Advisors under the first President Bush.

Just like the joke about one of Milton Friedman's students who fell asleep in class and awoke to a perturbed Friedman looming over him ("I missed the question, but the answer is 'increase the money supply'"), a large and increasing percentage of Journal opinion pieces these days have a predictable premise ("government is screwing things up") and foregone conclusion ("reduce its scope and power").

How? By cutting taxes, of course!

The only real suspense is the tortured logic the author will adduce to connect the beginning and end points.

That's "adduce" -- a real word, not a made-up one.

Look it up: "adduce: \ə-ˈdüs: 'to offer as example, reason, or proof in discussion or analysis.'

P.S.: My one Michael Boskin-taught economics class at Stanford (in 1979!) had about 400 other students in it, so I hardly got to know him personally. But I do remember his snarky policy on re-grading exams.

According to Boskin, anyone who felt their exam had been graded too harshly was welcome to appeal.

However, if so, Boskin promised that he would review their entire exam, and was "highly likely" to find an equal number of deductions to exactly offset any additional points the student was entitled to.

There you have it: Michael Boskin -- a record for intellectual honesty going back over three decades!

Friday, November 26, 2010

Sitting out Black Friday

Stampeding -- the Other Way

If you don't like shopping, and you don't like crowds -- at least, away from sporting events -- the charms of Black Friday can be lost on you (me).

On the other hand, today was a great day to buy office supplies at Office Max (I had the store to myself!).

Other stops: the terrific downtown Minneapolis Public Library (also uncrowded, and only $3 for up to an hour in their underground parking lot; and

Dayton's (er . . Macy's) Sky Room restaurant on the 12th floor, pleasingly light and open (with good values, too -- but no Lori Line-esque piano playing).

Virtually Staged Family Room -- "After" Shot

The digitally staged Family Room (above) is around the corner from this digitally staged Living Room.

Rather dramatic, wouldn't you say?

"Before" Picture - Family Room

I couldn't resist one more "Before" and "After" pairing, showing the game-changing potential of virtual (digital) staging.

See the next blog post, immediately above, for the "After" shot.

Irish Austerity: "Crimes and Mistakes"

(Modern) History Quiz

"You have to wonder what it will take for serious people to realize that punishing the populace for the bankers' sins is worse than a crime; it's a mistake."

Who said the above, about what?

A. President Obama, about TARP, zero percent interest rates, and other Wall Street bailouts.
B. FDR about investment bankers, circa 1933.
C. Paul Krugman, about the so-called IMF bailout of Ireland.
D. William Jennings Bryan, about the Gilded Age bankers.

Answer: C. (See, 'Eating the Irish" in today's NYT).

"A." is just wishful thinking; "B." and "D." never happened -- but could have.

Wednesday, November 24, 2010

"i.everything?" "" i.giveup

Gadget Overload

If you're over 50, somewhat technology-conversant, but definitely not a first (or even second) adopter, what do you call Apple's proliferating galaxy of electronic gadgets ("iphone," "ipad," "itouch," etc.)?

My brother-in-law's catch-term is "i.whatever."

Tuesday, November 23, 2010

So, Which is It? Down 2.2%? Or Down 26%?

Confusing Housing Statistics

"U.S. Home Sales Fell 26% in October."

--The New York Times (11/23/2010)

"Home Sales Fell 2.2% in October."

--The Wall Street Journal (11/23/2010)

So which is it?

Both, actually.

Home sales fell 26% in October, 2010 compared with October, 2009.

And they dropped 2.2% compared with the preceding month (September, 2010).

However, the real statistic of note for the Twin Cities market is the year-over-year number: down 41%.

That's not much of a surprise to local Realtors.

The only thing dulling the sting a bit is that the October, 2009 numbers were juiced by the (then-looming) tax credit expiration, one month away (November 30, 2009).

Living Room - After (Virtually Staged)

Now, Just Add Hardwood Floors!

If this "Before" and "After" sequence doesn't make you a staging convert -- nothing will.

Even this photo doesn't do the room justice, because there are oak hardwood floors under the carpet.

My favorite details?

The reflection in the (virtual) mirror above the Fireplace, and the (far end of the) Dining Room chair and table, in what is now an empty room.

This virtually staged Living Room -- and 2 other virtually staged rooms -- are a key part of my marketing campaign for 2705 France Ave. South, which came on the market last week at $439,900.

This smart Cape Cod has tons going for it: location just one block from Minneapolis' Cedar Lake; great curb appeal; quality construction; nice size (over 2,100 FSF) and floor plan; a 3 1/2 (!) car garage (2 1/2 detached, 1 car attached); updated mechanicals, etc.

All it's really lacking is cosmetics/decor.

So, I'm just offering prospective Buyers a little help visualizing the possibilities -- with full disclosure, of course.

Living Room - Before

North - South Korea Conflict = Lower Rates

Heightened International Tension Strengthens Dollar

The conflict between North and South Korea is having a predictable effect on credit markets this morning.

Specifically, whenever international tensions kick up, there is a flight to safety, which -- at least until now -- translates into demand for U.S. dollars and U.S. debt.

That strengthens the dollar, and (also) drives interest rates lower, however temporarily.

Monday, November 22, 2010

Thanks, Technical Reinforcements!

Now, THAT's Service

One of the biggest emergencies a Realtor can have is to have scheduled showings and a waiting client -- and no way to get into homes because their SmartKey is malfunctioning.

That wasn't quite my predicament late this afternoon -- my showings are scheduled for tomorrow morning -- but close enough.

James Allard at Technical Reinforcements arranged to be available by phone at 7:30 p.m. tonight, and remotely walked me through a problem with my proxy server setting ("proxy server what??") in less than 10 minutes.

Problem solved, showings saved.

Total cost?

$0 -- Technical Reinforcements doesn't charge existing clients (I am) for phone support.

All the company asks for in return is some positive word of mouth.


P.S.: the service I got was no fluke: Technical Reinforcements is the top-rated company on Angie's List locally for "Computer Repair & Services."

Wall Street's "Uncontained Failure"

Qantas' Pilots vs. Wall Street's

Here's a thought, apropos of (almost) nothing:

The cure to our economic woes has nothing to do with finding exactly the right monetary policy, or getting the Chinese to price the Yuan "fairly," or bridging today's yawning political chasms to reach necessary compromises.

The first step is to seriously and completely address the mess (still) left over from the Crash of '08.

(Sorry, I'm not going for "The Great Recession" sobriquet. Recessions happen, like the weather; crashes have man-made causes.)

Which men? (and almost all of them were).

There's really not much mystery at this point.

"Uncontained Failure"

For those not up to speed, here's the basic narrative to date:

Wall Street's largest firms created an esoteric, unaccountable financial monster -- the likes exceeding even the excesses of the 1920's -- that made their executives (if not their shareholders) rich beyond belief.

It grew and grew and grew . . . and then it exploded.

Unfortunately, just like the A380 Qantas jet whose engine blew apart on departure from Singapore, the economy's "financial engine" explosion was an uncontained failure.

And still is.

Which means the explosion fragments and debris escaped the engine casing and compromised the rest of the structure (economy).

Wall Street Accountability

Like the exceptional Qantas pilots, this country's economic pilots now face a three-fold task:

Step 1: Assess the damage

Which instruments are still working?

Which electrical and hydraulic lines have been severed?

Does the landing gear still work?

Etc., etc.

Only once a proper inventory of the damage has been done, however hastily, can efforts turn towards devising an appropriate response.

In the case of the banks -- "stress test(s)" or not -- step #1 has yet to be tackled seriously and honestly.

Step 2: Isolate the damage

The Qantas pilots quickly shut down the exploded engine and transferred (as best they could) precious power and fuel to the remaining, viable ones.

So far, this country's leaders have done the exact opposite: focused all their attention on the doomed engine, and diverted crucial resources from the functioning engines towards the destroyed one.

Even after the travails of the last few years, the U.S. banking system numbers something like 7,000-plus banks.

The idea that there is no banking system without the Too Big To Fail Behemoths is arrogant, insulting, and blatantly wrong.

Step 3: (Re)gain control of the craft

Fortunately, the Qantas flight had two additional senior pilots on board.

We have access (still) to old hands like Paul Volcker, plus an entire, new generation of financial experts, academics, and civil servants -- just as talented and public-spirited as Volcker was when he was appointed.

Who don't work for Wall Street, and don't want to.

Put them in charge. Then listen to them. (Here's my list of luminaries, for starters: "Nine Better Choices to Investigate Wall Street").

Where the Qantas-Wall Street parallel . . . um . . . breaks down is that Wall Street's "pilots" also owned and (shoddily) ran the airline; designed the jet's defective engines (and the rest of the craft as well); and, just for insurance, paid off the safety inspectors and government regulators who oversaw them.

That nothing has happened to them -- that they remain at liberty, rich, and -- incredibly -- still in charge, suggests not just that our financial and political systems are broken, but that our legal system may be as well.

"The Unrealistic Buyer": Top 10 Signs

Unrealistic Sellers Meet Their Match

Their counterpart, the Unrealistic Seller, has received more ink and attention, but these days Unrealistic Buyers are just as numerous -- and intractable.

As a public service to would-be Home Sellers, herewith are my top ten signs that you may be dealing with an Unrealistic Buyer (any resemblance to real persons isn't purely coincidental) :

10. They're on their third Realtor -- or don't have one.

9. They've been looking for more than a year . . .

8. and have seen more than 30 homes, which they've all pronounced "grossly overpriced" (and otherwise deficient).

7. They've yet to make an offer on a home.

6. They've already made offers on more than four homes -- none of which has even elicited a (genuine) counter-offer.

5. If they actually receive a serious counter-offer, they refuse to work with it.

4. They know the minutiae of the Purchase Agreement and Addenda as well as their Realtor -- and are better at opening lockboxes.

3. They offer more than 15% below a well-priced home's asking price (see also, #6).

2. They have no discernible timetable or catalyst (new job, baby, expiring lease, etc.) for buying a home (see also, #9).

1. They let you know that they're thinking about getting their real estate license.


Forewarned is forearmed (now read "Serious Buyers: Top 10 Signs" to contrast with the foregoing).

P.S.: Sign #11: they'll only agree to buy something for 20% or more below market . . . if they can sell their current home for 20% above market.

Sunday, November 21, 2010

"You Mean They Can STILL Screw Their Clients??"

"Cruel Kindness" -- and Vice Versa

Cruel to be kind in the right measure
Cruel to be kind it's a very good sign
Cruel to be kind means that I love you
Baby, got to be cruel, you got to be cruel to be kind

--Nick Lowe; lyrics, "Cruel to Be Kind"

Which of the following professionals have a legal duty to put their customers' interests ahead of their own?

A. Stock Broker
B. Insurance Agent
C. Realtor
D. Investment Banker

Answer: C

That's right: only Realtors owe their clients what is called a fiduciary duty.

That duty further subdivides into a duty of care, and a duty of loyalty: in plain English, don't be a screw-up, and don't screw your client, respectively.

The issue of fiduciary duty is a hot one these days because stock brokers don't currently owe their clients a fiduciary duty -- and don't want the details of the new financial reform legislation, now being drafted, to impose one ("Dear SEC: Please Make Brokers Accountable to Customers"; The NYT, 11/19/2010).

Instead, stock brokers prefer the current standard, which merely requires that they weigh the "suitability" of particular investments for their clients.

Incredibly, the industry is arguing against a higher fiduciary duty on the grounds that it will raise costs, which will hurt clients.

So, there you have it: allowing brokers to screw their clients is actually good for them, and preventing that is bad.

Weather and the Minnesota Housing Market

Of Skating Rinks & Steep Driveways

There are brilliant, sunny days, when every listing shows great, and the home's physical setting and views are shown off to their best effect.

And then there are days like today.

If you're reading this blog outside Minnesota, the Twin Cities awoke to a freezing rain and roads that resembled skating rinks.

For Sellers with steep driveways, it may be a good day to skip showings (or, back up a salt truck).

When .3 Looms Large

1.5 Story vs.
1.2 Story

When is .30 huge?

When it's the difference between a home that is 1 1/2 stories and 1.2 stories (and no, it's not kosher -- or mathematically accurate -- to round up to 1.5 from 1.2).

A home that is a legitimate 1 1/2 story can have an upper level that has almost as many finished square feet as the main level.

However, when it's a 1.2 story, the upstairs overhead is typically less than seven feet -- usually, much less.

The result is space that doesn't qualify as legal finished square feet, and practically, isn't really usable that way either (although it can still be valuable storage).

Qwest (Lack of) Technical Support

"24/7?" Try, "10/5"

So, if you rely on a Qwest DSL line for your Internet access, and it goes down, guess where Qwest's technical support line directs you.

Yup . . . the Internet -- specifically, Qwest's Web site.

The recording proceeded to inform me that technical support's regular hours are Monday thru Friday, 8 a.m. to 6 p.m.

There you have it: in a 24/7 world, Qwest is very much 10/5 (10 hours a day, 5 days a week).

Friday, November 19, 2010

Finding the Right Handyman for the Job

3 Keys, or, "Highest Common Denominator"

What's the key to getting good value for your "handyman dollar?"

Actually, there are three:

One. Having the names of a couple reputable handymen, with a range of skills and hourly rates;

Two. Knowing how expensive/demanding your individual repairs are; and

Three. Matching your repair list to the handyman.

That means identifying the most challenging repair on the list, then picking the most affordable handyman qualified to do that.

"Highest Common Denominator"

Personally, I know handymen who charge $25- $35 an hour, and are more than capable of tackling light carpentry, plumbing, or electrical issues.

I also know handymen who charge $60 (or more!) per hour, but can justify that by being able to do (practically) anything that a licensed plumber, carpenter, or electrician can do.

Factor in convenience and minimum trip charges, and there are plenty of occasions when the $60/hour handyman is a bargain.

But not for touch-up painting, unclogging a sink, or repairing kiddie gates.

Then, I go with the lower end of the range.

P.S.: One of the best qualities in a handyman is when they will honestly tell you if they don't have the skills to do something. A great handyman will also tell you when something can be repaired rather than replaced, and if so, the cheap vs. expensive option.

"Picking a Handyman -- Advanced": organizing your repair list by difficulty factor.

"Our" Banks, Warren? No, YOUR Banks

Warren Buffett's Freudian Slip

This land is your land
This land is my(?) land
From California to the New York island
From the red wood forest to the Gulf Stream waters
This land was made for you (and me?).

--Lyrics, "This Land is Your Land"; Woody Guthrie (tweaked by Ross Kaplan)

The first time I read "Pretty Good for Government Work," Warren Buffett's defense of the bank bailouts in The New York Times this week, it all seemed perfectly reasonable and logical: the system truly was on the verge of a melt-down in September, 2008, and doing nothing surely would have brought on -- if not a financial apocalypse -- something very, very nasty.

But re-reading it, I couldn't help coming back to a single, offending word: 'our.'

Here's the context:

Just over two years ago, in September 2008, our country faced an economic meltdown. Fannie Mae and Freddie Mac, the pillars that supported our mortgage system, had been forced into conservatorship. Several of our largest commercial banks were teetering. One of Wall Street’s giant investment banks had gone bankrupt, and the remaining three were poised to follow. A.I.G., the world’s most famous insurer, was at death’s door.

--Warren Buffett, "Pretty Good for Government Work"; The New York Times (11/16/2010)

I suppose if I owned tens of millions of shares in Wells Fargo, Wachovia, and Moody's (the credit rating agency); $10 billion in Goldman Sachs bonds that I very much wanted repaid; billions in credit default swap positions, etc. etc. -- I would start to think of the financial system as "our" financial system, too.

But in reality, it's "their" financial system.

They own it, they derive the lion's share of benefits from it, and they -- quite logically -- defend it.

Bailout Red Herring

The second canard buried in Buffett's apologia is the inference that critics of the bailout advocated doing nothing.


Away from the Op-Ed pages of The Wall Street Journal and The New York Times, there has been a deafening chorus -- nay, consensus -- on what government properly should have done -- in fact, should still do now -- in response to the Wall Street-engineered financial melt-down.

Of course, that's after acknowledging that the very best course of action would have been actually trying to prevent it in the first place (vs. enabling it).

In a mythical letter addressed to "Uncle Sucker," Blogger Barry Ritholtz puts it best:

When the crisis struck, you did not seem to understand the role you should play. Instead of stepping up to halt the financialization, to unwind it, you gave away the shop. You failed to extract concessions from firms on the verge of bankruptcy. Your negotiating skills were embarrassing. In the face of meltdown, you panicked.

You could have undone the decades of radical deregulation at that moment. You could have fired the incompetent management, wiped out the shareholders who invested in insolvent companies, gave the creditors and bond holders a major haircut for their foolish lending. Instead, you rewarded them for their gross incompetence.

The solutions you ran with were ad hoc, poorly thought out, improvised. You crossed legal boundaries, putting the Fed in the position of violating its charter and exceeding its mandates. You created a Moral Hazard, the impact of which may not be felt until decades in the future.

--Barry Ritholtz, "Dear Uncle Sucker . . ."; The Big Picture (11/17/2010)

There are no Pulitzers -- yet -- for blog posts, but if there were, I'd nominate "Dear Uncle Sucker."

Read Buffett's piece, then Ritholtz's in its entirety, and decide for yourself.

P.S.: Dear RE/MAX and Coldwell Banker Burnet: looking for an experienced -- albeit opinionated -- Twin Cities Realtor (and blogger)?

If my boss, Mr. Buffett, reads this, I may be available (Buffett is chairman of Berkshire Hathaway, the ultimate parent company of Edina Realty).

Thursday, November 18, 2010

Mill(stone) Rate

2011 Hennepin County Property Taxes

Every time I think I'm a Democrat, they do something stupid. Every
time I think I'm a Republican, they do something greedy.

--Jay Leno

What do you call proposing to steeply raise property taxes against a backdrop of weak home prices and an economy just emerging, maybe, from recession?

How about, greedy and stupid?

Like a couple hundred thousand other homeowners in Hennepin County, I got my proposed 2011 property tax statement yesterday.

My assessed tax value: down 3% from last year.

My proposed 2011 property taxes: up 12%.


Add: Arrogance

How can property taxes being going up at the same time assessed tax values are going down?

Because of something called the "mill rate," or the percentage tax levied on each $1 of assessed value, which has been increasing.

Good thing my Realtor's income, 401(k), and interest on my savings have all gained so smartly the last year, allowing me to easily foot that increased property tax bill.


Most homeowners -- myself included -- will figure out some way to come up with the extra dough.

But we'll have to compensate by finding savings elsewhere.

Such does not a robust recovery make.

P.S.: And no, I'm not expecting a 12% increase in the services I receive for my increased property taxes.

Dried vs. More Dried Apricots?

George Carlin-ism

I promise to limit myself to only a couple George Carlin-ism's per year (last one: 'What's the Past Tense of Sightsee?").

In that vein, I pose the following question: what happens if you don't seal a bag of dried apricots? (as some people in my household insist on doing).

Aren't they already dried out??

P.S.: You're not an apricot aficionado if you don't know the difference between California apricots (pictured above) and Turkish apricots.

The former are tart and tangy (and much more expensive); the latter, sweet and much stickier.

Trick Photography?

5229 Duncraig Road in Edina Highlands

In a post earlier this week (The Far-Away(?) Buffet), I discussed clues that something "just isn't right" in a particular photo.

So, is the apparently huge Living Room shown above for real?

You 'betcha.

The MLS dimensions are 27' x 17', or 459 square feet -- that's the size of some one bedroom houses in South Minneapolis.

Meanwhile, the huge Living Room is consistent with the huge house it's in -- almost 6,800 square feet (address: 5229 Duncraig Road, in the Edina Highlands neighborhood off Vernon; listing agent is John McDonald).

I'll see the rest of it a half hour from now, when I attend Edina's weekly Exceptional Properties meeting . . . likely in this very same room.

Showing Feedback. Or Not.

Deafening Silence

"If you don't have anything nice to say, don't say anything at all."

It drives (some) Sellers nuts, but the cold reality is that not all Buyer's agents respond to requests for showing feedback.

Many requests.

My standard practice as a listing agent (representing a Seller) is to make 2-3 attempts to find out how a showing went, especially the first 7-10 days a home is on the market.

However, there's really no point in persisting beyond that.

Realtors rank pretty high on the 24/7 "accessibility scale" (see, "Getting a Realtor's Attention"); if they have a Buyer with continuing interest . . . you'll know about it.

"Quantitative Easing??" Try, "Printing More Idiots"

Is the Fed Repeating
Wall Street's Sins?

Joe Nocera: At a certain point, Wall Street ran out of clients to sell [securitized debt] to. So the only way it could keep the machine going was to buy it themselves.

Jon Stewart: So, they infected themselves. At the end, they themselves became vampires.

[Which suggests] a new theory on the financial crisis: it occurred because of an idiot shortage. If I'm the Fed, I just print more idiots.

--Bethany McLean and Joe Nocera Interview; The Daily Show (11/16/2010)

That's it!

Instead of calling the Fed's current monetary policy something arcane like "quantitative easing," how about calling it "printing more idiots?"

At least, that's how I understand it.

Just like Wall Street ran out of "idiots" to sell securitized debt to, the U.S. Treasury has started to run out of investors to buy (more) U.S. debt.

China already stuffed to the gills with U.S. bonds?

Ditto for Japan, Singapore, South Korea, Saudi Arabia and all our trading partners on the other side of our yawning trade deficit?

No problem -- we'll buy the bills and bonds ourselves!

Two years, five years, ten years . . . you name it.

In fact, we -- the Fed -- will buy so much, we'll actually drive interest rates down.

Which is quite an accomplishment, given that long term interest rates have already collapsed, and short term rates are effectively zero.

Nothing could possibly go wrong with such a scheme . . . . right??

Wednesday, November 17, 2010

Totino's Anecdote

Favoritism? Think Again

I've been going to Totino's literally since the 1960's -- first, in their original Northeast Minneapolis location, and the last four years, in their "new" location in Mounds View.

Unfortunately, about the only time the Mounds View location is convenient is when I find myself in the far (for me) Northern 'burbs.

Like yesterday.

Paying my bill to Rose Totino's grandson, who now runs things, it came up that he actually went to the high school, Totino-Grace, named for his Grandmother (the story is that the name change accompanied a very generous family donation, way back).

I casually offered that going to a school that has your family's name on it must have greased the kids, just a little bit.

Not according to the grandson; he claimed that the teachers were especially tough on him, to show they weren't playing favorites.

Only in Minnesota . . .

P.S.: I recommend the Special II, with the (Sonny's) spumoni ice cream.

"Dear Wall Street CEO" -- A Thanksgiving Missive

"Living Richly," vs. "A Rich Life"

[Editor's note: It's a little bit early for a Thanksgiving missive, but on the premise that no one will actually be reading this blog then, here goes:]

Dear Wall Street CEO:

Do you know the difference between living richly, and having a rich life?

Based on your words and actions, I'm guessing you don't.

So, let me offer my distinction.

Living Richly

Living richly is all about keeping (financial) score: how many homes do you have, how much they're worth, how big your, uh . . . "nut" is.

By contrast, having a rich life isn't about money (unless you're desperately short, like tens of millions of Americans these days).

Instead, it's defined by such things as:

--How many people trust you implicitly -- and how many people you trust that way;

--Having work that is not just remunerative but satisfying, and that harnesses your professional skills and talent(s);

--Whether you're part of a (reasonably) functional, loving family -- however you define it -- as well as a healthy larger community and society; and

--How much you use your life to improve the world as you found it -- indeed, how people will speak of you once you're gone (assuming they do).

On all these latter counts, I suspect you do quite poorly -- no matter how much money is in your bank account, or, after you're dead, how many concert halls, University buildings, or endowed professorships bear your name.

In the business world, you're a big winner -- there's no denying.

But that's hardly the only realm there is, or even the most important one.

Just some "food" for thought this Thanksgiving . . .


Ross Kaplan

Your fellow American and compatriot

Risk of Bad Statistics: 99.7%

That's One Awfully Clear Crystal Ball

Smart Money magazine is running a piece ("Fishing for Housing Bargains") that profiles six housing markets nationally that now appear to be attractively priced.

To support that claim, the article purports to calculate the "risk of price decline."

The risk ranges from 3.1% for Omaha, to 25.4% for San Antonio; according to the author(s), the risk of a price decline in Pittsburgh (pictured above) is 12.0%

All six markets may indeed be good values.

But the idea that Smart Money (or anyone else) can precisely calculate the downside risk -- to .1%, no less -- is a hoot.

Save the $4 cost of the magazine -- and the 10 minutes it'll take you to read the article.

P.S.: As I like to tell my clients who ask for market projections: 'if you tell me what interest rates, unemployment, GDP, and housing inventory are going to be . . . I'll give you a reliable local housing forecast.'

Surprising Obstacle to Virtual Staging

Not So Virtual "Virtual Staging"

So, what's holding up virtual staging? (see also, "Virtual Staging: Ready for Prime Time?")

Not Realtors, who by and large are game (even if they have to dig a little deeper into their pockets to do it).

Not clients, who stand to save a small fortune on actual staging costs.

And not local Boards of Realtors, who as best I can tell are behind the curve addressing the issue -- but have hardly forbidden the practice.

Give up?

The virtual staging companies themselves.

(Legal) Boulders in Road

I'm in the process of doing virtual staging for the first time, and was eagerly awaiting a phone call from the (Atlanta-based) vendor, who contacted me Monday.

"Can you give me an idea what would you like the rooms to look like?," he asked.

By way of introduction, I explained that the home has a traditional look and formal floor plan, so therefore the furniture choices and arrangement should reflect that.

However, my highest priority -- and the reason I was popping for virtual staging -- was to be able to show prospective Buyers how the house would look without the dated, loud wallpaper -- and with the oak hardwood floors uncovered (now obscured by equally loud, decades-old carpeting).

"Check on the furniture, but can't change the flooring or wallpaper," the virtual stager told me flatly.

Litigation Risk -- And How to Avoid It

"Huh?!?," I said incredulously.

Due to litigation risk, he explained, the company's policy is not to alter a room's physical attributes, only to show how it would look with furniture and accessories added.

For a virtual staging company, isn't that like tying 1 3/4 arms behind your back?

Or, as Henry Ford might say, "you can have any color Model T, as long as it's black."

"One Size Fits All" Policy, For Now

I proceeded to explain that I am a former lawyer, and had no intention of using the staged photos in a misleading or deceptive fashion; or getting myself, my broker -- or them -- sued.

Specifically, I said that I would:

a) stipulate that I would not use the photos online or in MLS marketing materials, but only as "blow-ups" that I would display, physically, in each of the rooms, to contrast the "Before" and potential "After" appearance;

b) understood that each of the blown-up photos would be stamped with a conspicuous "virtually staged" disclaimer; and

c) would present prospective Buyers and their agents with a written acknowledgement for them to sign before entering the home and doing a showing.

What Buyer could claim that they'd been deceived after complying with all that?

"No go," came the quick answer.

Clearly, the virtual staging companies are risk-averse, and don't want to be in the business of policing how Realtors use their photos once their computer whizzes (electronically) ship the photos out the door.

I get that.

But by declaring the best applications off-limits -- at least for now -- the virtual staging companies are very much undermining demand for their services.

Tuesday, November 16, 2010

The Far-Away(?) Buffet

This photo caught my eye because the built-in Buffet looks positively miles away -- and it's in a home that has less than 1,400 finished square feet.

So, how far away is it really?

According to MLS, the Dining Room is 9' wide, and Living Room is 13' wide.

Total: 22 feet, or somewhat less than a mile.

How to Keep Hardwood Floors Uncovered

(Borrowed) Realtor Tools of the Trade

The cobbler's kids always goes barefoot.


The physical therapist's husband's back always aches.


Being married to a physical therapist doesn't guaranty me free treatment for my achy back; on the contrary, that's the last thing my wife is interested in doing after attending to patients all day.

But, that doesn't mean there aren't fringe benefits.

My new listing has gorgeous hardwood floors covered by carpet, which stubbornly wouldn't stay peeled back: duct tape, heavy stone bookends, and large rocks (literally from my yard) didn't work aesthetically and/or literally.

The solution?

My wife's 5 lb. and 10 lb. physical therapy weights -- also ideal as "paper (carpet?) weights."

Broker Open Today 11 a.m. to 1 p.m.

One Block to Cedar Lake!

Where: 2705 France Ave. South, in Minneapolis' Sunset Gables neighborhood
What: 3 BR/2 Bath Cape Cod with almost 2,200 FSF, including a huge first-floor Family Room.
How much: $439,900
Who: listed by Ross Kaplan, Edina Realty City Lakes
When: on market yesterday (Nov. 15).

If you're anywhere Cedar Lake over lunch hour today, please feel free to stop by my Broker Open at 2705 France (even if you're not a Realtor).

You'll be impressed by this home's fine construction, period details like cove moldings and a Dining Room arch, and the spacious, eat-in Kitchen.

. . . . and there's a 600 square foot, 2 1/2 car garage (detached) in back to go with the one car attached -- not something you commonly find with 1938 Cape Cod's in such a great location.

P.S.: in keeping with the "man plans, God laughs" theme a few posts back, my gorgeous Fall shots (including the one above) turned out to have a shelf life of 48 hours: taken last Thursday, the Twin Cities almost immediately turned white with the arrival of the season's first big storm Friday.

Monday, November 15, 2010

On Your Mark . . Get Set . . . Dig!

"The Levi Strauss Strategy"

Caterpillar Inc. said it will buy mining giant Bucyrus International Inc. for about $7.6 billion as the heavy-equipment giant looks to bolster its mining-equipment production.

--"Caterpillar to Buy Bucyrus"; Wall Street Journal (11/15/2010)

What do corporations do when the price of metals -- both base and precious -- double and triple?

Start digging.

Or, in the case of Caterpillar, buy a company that makes digging equipment.

Call it the Levi Strauss strategy: there's as much (or more) money to be made selling supplies and equipment to the gold diggers, as there is in digging for gold.

Powerless in Minneapolis

Not So Xcellent

No, this isn't a post about how ordinary citizens no longer control this country's financial laws, or economic policy generally.

It's about literally being without power in Minneapolis.

From 9 a.m. Saturday morning until 6 p.m. Sunday night.

With my in-laws staying with us.

Just a Minute. Not.

For non-Minnesotans reading this blog, the season's first, big winter storm descended late Friday night, dropping about 8" of very heavy snow in the Twin Cities over the next 24 hours.

It's unusual for a storm to knock out power, and if it does, it's unusual if the outage lasts more than a couple hours.

Which is still (very) cold comfort when find yourself going to sleep on Saturday night around 8 p.m. in a pitch-dark house with no heat.

Dodging a Bullet?

In fact, mild weather (mid-30's) mitigated what could have been a much worse situation.

Instead of well-insulated homes hovering in the 40's and 50's, my and my neighbors' homes could have plunged in temperature, threatening both people's physical safety and plumbing.

(Don't think frozen pipes are a big deal? They can cause tens or even hundreds of thousands in damage to a home.)

Posing an even more immediate threat: the downed power line in the alley a block away from me.

Called in by multiple neighbors Saturday morning, Xcel Energy had yet to attend to it by late this (Sunday) afternoon.

If there had actually been electricity flowing through those lines, someone could have been electrocuted.

Shades of Katrina

According to Xcel Energy's voice recording, the storm knocked out power to 80,000 metro customers, and it was busy dispatching repair crews -- some from nearby states -- to fix things as fast as it could.

If so, its crews did a very good job of hiding in my very centrally located Minneapolis neighborhood (Exhibit A: doing nothing about a downed power line).

Nor, apparently, did any Xcel Energy senior executives deem 80,000 powerless customers a serious enough problem to warrant coming in to work: the customer service representative I ultimately reached handed me up to a supervisor, who informed me that her supervisor wouldn't be available till 9 a.m. Monday.

Also AWOL: the Star Tribune, the local Minneapolis paper, with nary a word (OK, paragraph) devoted to the power outage (non) response.


Which leaves the question: why did a big-but-not-spectacular storm throw Xcel Energy for such a loop?

Is the electrical grid more decrepit these days?

Is Xcel scrimping on overtime?

Were the line workers all up north deer hunting?

I honestly don't know.

But whatever financial calculations and contingency plans Xcel made (or didn't), they surely were the wrong ones.

Next time a winter storm knocks out power, temperatures the next 48-72 hours may not be so forgiving.

P.S.: one silver lining in all this? A virtuouso performance by my City Council Member, Lisa Goodman.

In sheer exasperation, I looked up her home phone number Sunday night, and was shocked to find it listed.

I was even more shocked when Ms. Goodman returned my message within 10 minutes.

She proceeded to give me a mini-tutorial on Xcel Energy's inner workings, as well as multiple suggestions for getting action (call the fire dept. if it's genuinely an emergency) and avoiding another power outage (work with neighbors to bury the power line serving our homes).

Sunday, November 14, 2010

Mpls. Ross Kaplan or NY Ross Kaplan

"Will the Real Ross Kaplan Please Stand Up?"

Yes, I work in real estate.

And yes, I used to live on the Upper West side in Manhattan, where this "For Rent" sign appears.

But that's not me co-listing the office space pictured at left (snapped and forwarded to me by my sister).

At least, it's not the Ross Kaplan who lives in Minneapolis and sells real estate for Edina Realty (and writes this blog).

Do a Google search (I have), and it turns out that there are actually 8(!) of us in the U.S. and Canada.

Late Fall Checklist

Cubs' Fans -- and Procrastinators' -- Lament

"Man plans, God laughs."

--Yiddish proverb

So, here's the status of my late Fall checklist as of last Friday:

Blow out the sprinkler system?


Bring in the garden hoses?


Remove the window screens and store them in the basement?


Rake and bag all the leftover leaves?

"First thing S-a-a-t- . . . . . ."

As Chicago Cubs fans are fond of saying, "wait till next year."

Broken Clocks and Stale MLS Photos

Out-of-Date MLS Photos


One winter storm and 48 hours later, approximately 28,000 MLS listings in the Twin Cities (99.7% of the total Active properties) suddenly have dated, out-of-season photos.

And something like another 200 sorely neglected properties on MLS -- my estimate of how many still sport photos from last winter -- suddenly look fresh and updated.

What's that they say?

Broken clocks are right twice a day, and out-date MLS photos look fresh 3 months out of the year (or, if they're Winter shots in Minnesota, make that five months).

Saturday, November 13, 2010

"'Possible' Short Sale"

Warning: Use of "May" May be Problematic

For the uninitiated, let me decode "possible short sale":

The odds of it not being a short sale are about as high as the following bad things not having occurred (which is to say, infinitesimal):

"I may have scratched the car." (wife to husband -- or vice versa)

"The disposal may not be working right." (child to parent, after dropping rocks into same)

"We may have lost your reservation." (uttered at the car rental desk)

"The plane may be delayed."

"We may have damaged your one-of-a-kind, antique lamp." (furniture movers to customer)

"Mommie, I think something may be wrong with the goldfish."

The kiss of death?

A "possible short sale" being handled by "an experienced short sale agent."

P.S.: It's interesting how many of the above are travel-related. Hmmm . . .

Friday, November 12, 2010

Market Correction: "THERE it is"

Gold Down 3% . . Mosaic Down 5% . . . Apple Down 3% etc.

If you're a fan of "30 Rock," you'll recognize Liz Lemon's signature line ("There it is . . ") when she spots the inevitable flaw in her prospective new, too-good-to-be-true suitor.

So, for everyone waiting for a break in what's been an uninterrupted tear for such things as commodities and high-flying stocks . . . "[t]here it is."

Whether today's sell-off is due to profit taking, or Cisco's earnings miss, or tightening Chinese monetary policy -- remains to be seen.

Home Spotlight: 20xx Laurel

$50,000 Price Reduction

What's the big deal about a $50,000 price reduction?

They're practically run-of-the mill these days, especially in the upper price brackets.

What you don't often see is a $50,000 price reduction off of a home listed for $250,000, like the one shown above.

For the math impaired, that's a whopping 20% (vs. the more typical 3% to 5%).

Located at 20xx Laurel in Minneapolis' Bryn Mawr neighborhood, this 6 BR/4 BA Victorian with over 4,500 square feet is now listed for $200,000, after being reduced $50k on Wednesday.

Compounding the Seller's misery: they paid $560,000 for it just over three years ago (and, no surprise, the Seller discloses that it's a possible short sale).

P.S.: I discuss price reductions in much greater detail in a post titled, "Nurse! I need a price reduction, stat!!"

The Brett Favre of Realtors?

Realtor Occupational Hazards

No, I'm not offering to trade places with Brett Favre (unless I get his paychecks, too).

But it has been a memorable year for me personally, at least as far as work-related dings and scrapes go.

Last January, in -10 degree weather measuring the exterior of a home, I fell into a (snow-covered) window well.

The adjacent Living Room storm window fared worse than I did, but I still sustained a couple memorable cuts and bruises (including to my ego).

Taking One for the Team

Then, over the Summer, a very long credenza that my (out-of-state) Seller was supposed to have removed before closing . . . wasn't.

The other Realtor and I gamely wrestled it to the garage -- but my back has been reminding me ever since not to attempt anything similar.

And then yesterday, getting a new listing ready, my toe found the remnants of an entertainment center that had been anchored to the floor (specifically, an exposed bolt).

My toe will heal -- but the sock is a goner (I was in my bare feet because the carpets had just been cleaned).

Better me than a prospective Buyer or their Realtor, I suppose . . . . (and no, it won't happen to anyone else because a handyman is taking care of it today).

Thursday, November 11, 2010

"Pulled Forward Demand" -- Take II

Best Time to Buy New Windows?

When is the best time to buy new windows in the next 12 months?

Very possibly, this Jan. - Feb.

Isn't that after the 30% tax credit (for energy-efficient home improvements) expires?

Well, yes.

To counteract an anticipated slump in demand after Dec. 31, window contractors are gearing up big sales then (or so, my contact in the industry says).

Realtors experienced much the same phenomenon last Spring, when federal tax incentives to buy a home expired April 30.

In many cases, the subsequent drop in home prices outweighed the tax incentives for buying earlier.

P.S.: any procrastinators still trying to order and install windows before Dec. 31 are too late; the effective deadline for getting an order turned around in time was about a month ago.

Investing $1,000 in Lehman Bros, AIG -- and Beer

Realtor "Water Cooler" Talk

The water cooler is long gone, of course.

Instead, we Realtors have meetings.

Lots and lots of meetings.

I picked up this nugget -- plus some good market info -- at Edina Realty's Exceptional Properties meeting this morning (anecdote courtesy of downtown Manager Matt Loskota):

"If you invested $1,000 three years ago in AIG, what would you have today?"


"If you put that same $1,000 into Lehman Bros. stock, what would it be?"


"Now, how much would you have if spent the $1,000 on beer?"

"$235 . . . If you'd kept the aluminum cans."

Disproves (sort of) that line about "you don't buy beer, you rent it."

What's Selling: Hopkins

Days on Market: 12

: 301 13th Ave. North, near downtown Hopkins
What: 3 BR/2 Bath stucco bungalow with over 1,800 finished square feet; nicely updated.
When: listed 10/29; off market yesterday (11/10)
How much: asking $250k
Who: listing agents -- Stacy and Christina Cranbrook (Edina Realty); selling agent -- Nancy Bourland (Edina Realty)

"We must all hang together, or assuredly we shall all hang separately."

--Benjamin Franklin

The secret to this sale?

The price, location, condition, and curb appeal all helped.

But my educated guess is that the key was the "mini-Broker tour" on Nov. 2 (a week ago Tuesday).

That's when 20 agents with "Active" Hopkins listings -- myself included -- collaborated to all hold our listings open between 11 a.m. and 1 p.m., complete with drawings and catered lunches at many locations.

All that publicity generated lots of traffic, which raised everyone's exposure and resulted in at least two other deals that I'm aware of.

The home is officially "Pending" until it is scheduled to close Dec. 10.

"Master" vs. "Owner's Suite"

Real Estate PC

If you haven't noticed, you seldom see a home advertised with a "Master Suite" anymore; these days, it's an "Owner's Suite."

And it's not just Realtors.

A couple years ago, the repairman working on our furnace referred to our main floor thermostat as the "master," and the satellite thermostats on the upper and lower levels as "slaves."

That's not the terminology I heard the repairman use yesterday.

Hopefully, it's still OK to "master" the art of something (cooking, painting, etc.); refer to the original as a "master" recording, etc.

Wednesday, November 10, 2010

"Everything is Broken"

When it Rains it Pours?

Broken lines broken strings
Broken threads broken springs
Broken idols
broken heads
People sleeping in broken beds
Ain't no use jiving
Ain't no use joking
Everything is broken.

--Bob Dylan, "Everything is Broken" lyrics

I thought the saying was that things break in groups of three.

In the Kaplan household, that was barely half a morning's worth the other day.

Three . . . Squared

The list of casualties in just the last week include:

--dead car battery
--broken garage door sensor
--broken glasses (daughter, age 6; courtesy of son, age 8)
--broken vacuum
--dead cell phone (wife)
--broken cell phone clip (husband)
--broken coat zipper (daughter)
--broken belt buckle
--clogged master bathroom sink
--broken gas fireplace mechanism

Detect a theme?

We Kaplans may not make money on all-you-can-eat buffets, but we definitely come out ahead on home warranties and AAA.

P.S.: everything I know about cars, I owe to Saab: I learned the name and function of literally dozens of parts as they broke and needed replacing.

Global Warming & the (MN) Housing Market

Minnesota: Global Warming Winner

As Minnesotans enjoy a record-warm early November, one can at least daydream about what shorter, milder winters might mean for the local housing market (local farmers can already attest to the delayed frosts and earlier thaws -- this year's first hard freeze in the Twin Cities was late October!).

Here are three foreseeable, long-term consequences:

One. Busier January's, and less seasonality generally.

Traditionally, the Spring market -- liberally defined as February - May locally -- is by far the most active time for the Twin Cities housing market.

Some of that is due to the dominance -- or at least preponderance -- of family home buyers, who like to buy in Spring, then close in Summer with enough time left over to be ready for Labor Day and the beginning of school.

However, at least some of Spring's pop is due to demand pent up by the preceding frigid weather.

Two. Higher population growth due to in-migration.

If Minnesota ever loses its reputation for bone-chilling winters, people fleeing so-called "sand states" (FL, CA, AZ) may start considering it.

Three. Fewer Minnesota "snowbirds."

The flip side of higher immigration is less emigration -- specifically, older, more affluent Minnesotans who now spend part of the year in warmer climates (and tend to move away permanently as they age).

Who wants to bake in Florida or Arizona heat when Minnesota is increasingly temperate?

P.S.: with a mean elevation of 1,200 feet, and more than 1,000 miles from the closest ocean, Minnesota isn't exactly threatened by rising sea levels.

Rogers: 'Agriculture Better Than Gold'

The Other "Black Gold"

I expect to make more money in agriculture than I do in gold.

-- Investor Jim Rogers

Jim Rogers might not be quite the household name that Warren Buffett or George Soros is, but long-time investors know Rogers as an astute, independent market analyst -- who's made gobs of money, for both himself and his clients, spanning several decades.

So, it's noteworthy that Rogers has been beating his investment drum even louder for agriculture the last several years than he has for gold.

His rationale?

Farmland ("black gold?") is the ultimate play on rising inflation and commodity prices.

Gold has skyrocketed the last few years; farmland, not so much (yet).

Farmland isn't my specialty, but if you're an investor who's interested in buying some . . . I'll help you find someone at Edina Realty who's an expert! (and I guaranty, there is one).

Tuesday, November 9, 2010

A Realtor's Take on Recessions & Booms

"So, How's the Market?"

"A recession is when your neighbor loses their job. A Depression is when you lose yours."

--uttered by Presidents Truman and Reagan (and many others)

Little remarked -- but equally true -- is the converse: a "bounce," at least in the real estate business, is when you are busy; a "boom" is when you're swamped.

That's regardless of what's otherwise happening in your office, the overall market, various parts of town, etc.

After a torrid May-Sept, and a quiet(er) October, I am personally very busy heading into Thanksgiving and the year-end.

The principal caveat: Buyers now are expecting -- and getting -- deals.

P.S.: A colleague characterized this market as one in which "Buyers are getting the last word."

I'd go even further: Buyers in today's market are getting the last sentence -- or paragraph.

Monday, November 8, 2010

Microsoft: 'Buy the New Windows Phone. It's Boring.'

Less Addictive Than Competitors' Phones?

"Less staring. More clubbing."

--Sales pitch, new Windows phone 7

Having let my post-election guard down a bit -- fewer political commercials to screen -- I unwittingly caught a glimpse of Microsoft's TV ad campaign for its new Windows phone.

Apparently, its message is that people who are so obsessed with their cell phones that they're oblivious to everything else are dorks and boors.

"If you can't beat them . . . make fun of them??"

That may certainly be true, and it may even be a public service to point it out.

But that still seems to be an odd message coming from a company . . . trying to steal a slice of the cell phone market.

What's next -- a food company that markets its products by saying they taste so bad, you'll eat less of them and therefore be thinner??

How about a flat panel TV maker touting a new screen so blurry you won't be tempted to watch as much?

Flushing Savers From Their Foxholes

"Certificates of Confiscation" Once Again?

Certificate of Confiscation: 1970's term for bonds, certificates of deposit (CD's), etc. yielding less than (rising) inflation.

How do you get people (and corporations and banks) to stop hoarding cash, and put it to work, stimulating the economy?

Reduce interest rates to zero.

But what if that still doesn't do the trick?

Make holding cash not only unremunerative, but costly.

The best way to do that is to devalue the currency and/or create inflation, so that the value of cash steadily erodes, precipitating an inexorable stampede into . . . anything else.

Fleeing Cash

Which is basically what has been happening since late August, when The Federal Reserve signalled its intent to further stimulate the economy by printing more money (called "quantitative easing").

Since then, stocks have rallied about 10%, and commodities -- especially gold and oil -- are up anywhere from 15% to 40%.

Meanwhile, the dollar is down 8% against a basket of major currencies.

(Un)Intended Consequences

The problem with driving savers out of their negative-yielding foxholes is, what comes next?

The Fed hopes that all that liquidity will find its way into the stock market, driving up prices and creating a "wealth effect" that will spur spending and the broader economy.

But it's just as plausible that erstwhile savers will switch their affinity to something -- anything -- that promises immunity from central bank debasement.

That list includes: gold, silver, oil, wheat futures, Swiss francs, Australian dollars -- you name it.

As those things appreciate, they create inflation, which punishes consumers, which hurts the economy.

Can you say, "full circle?"

Sunday, November 7, 2010

$2,000 a Bedroom

Powderhorn Park Duplex for $18,000

Where: 30xx 11th Ave. South, in Minneapolis' Powderhorn Park neighborhood.
What: listed on MLS as a duplex with 8 Bedrooms and 4 Baths, "rehab needed."
How much: Listed for $19,000; sold for $18,000 (tax assessed value = $83,500).
When: listed 9/15; closed 10/21.

Clients asked me to look up how much this South Minneapolis duplex sold for.

You were right, guys: under $20,000 . . .

Dear Google: Please Get Your Sh*t Together

Message to Google (See Above*)

Don't be evil.

--Google corporate motto

I suppose it's the blogging equivalent of losing an election to a deceased opponent, or "none of the above" on a ballot.

What am I talking about?

Routinely being buried on Google's search engine rankings by dozens of other Twin Cities real estate blogs.

That's quite an accomplishment, given that there aren't dozens of such blogs; charitably defined (see next), I come up with no more than 8-10 real estate blogs locally (including some truly excellent ones, by the likes of Aaron Dickinson and Teresa Boardman).

What constitutes a "genuine Twin Cities real estate blog?"

My three criteria are: 1) regular posts -- if not daily, at least multiple times weekly; 2) original (vs. "borrowed" or syndicated) content, with a consistent point of view; that 3) regularly discusses and analyzes the local (Twin Cities) and national housing market(s), respectively.

Bone to Pick

So, if you search "Twin Cities real estate blog" on Google this morning, what will you find?

Here's a (partial) roll call of putative Twin Cities real estate blogs that currently out-rank "City Lakes" (which, for the record, pops up 17th in response to the query, "Twin Cities real estate blog"):

--"Living Twin Cities" (#9): last three posts are Oct. 5, Aug. 11, and July 20 (less content than I've posted this weekend).

--Pete Aplikowski's Real Estate Blog (#7), featuring all of three posts in October, and none yet in November.

The blog's solitary September post largely consisted of this zinger:

If you know anyone who needs help renting their property, please let me know. Sometimes it makes more sense than selling it given the current market conditions. I can handle all the details, showing property, drafting lease, etc.. The fees for this are very minimal compared to selling.

--"Minneapolis Real Estate Blog" (#5): Visit this one and you'll see that the author abandoned the blog in favor of a new-and-improved one last April; the post prior to that is from July.

July, 2009.

Search Engine (Dis)Optimization

Honestly, I'm delighted that anyone reads my blog.

And I certainly wouldn't expect every Realtor-blogger out there to generate original, quality content on a daily basis.

Or for Realtors to blog at all.

But that hardly explains getting lapped by less active (or defunct!) local realtor blogs.

So what does (explain it)?


I'll leave the search engine algorithms to Google's quants, but you'd certainly suspect one (or a combination) of these explanations: 1) Google searches can be gamed; 2) Google searches aren't so smart after all; 3) they're bought and paid for.

Can you say, "pay-for-play?" (or more to the point, "Google Adwords").

If it's #3, how about ditching the false piety (see, corporate motto) and providing disclosure to that effect ("our search results are dictated by corporate sponsors")?

And to think, all this from the search engine not owned by Microsoft (don't even get me started on "Bing").

The graphic above shows the number of visitors and page views for City Lakes Real Estate from Sept. 15-23.

The "spike" (statistical middle finger) was Monday, Sept. 20, when my post on Elizabeth Warren ("The Wall Street Journal Whiffs on Warren") got picked up nationally.