Switching Phones vs. Switching Homes

A Case of, "If it 'Aint Broke? . . .""

Are would-be home Buyers sitting on their hands for the same reason I'm still using my (almost) three-year old Palm Treo?

Granted, I'm not the typical cell phone buyer.

As a Realtor, I want my cell phone to have an infrared sensor so it can double as a "Smart Key" (what Realtors use to get into houses), just like my current phone does.

It also needs to seamlessly "hot synch" with Outlook, so that I can keep track of my appointments and my existing, 1,500 contacts (give or take a couple hundred).

My wife also needs a phone, so suddenly I need to become an expert on all the major carriers' "family plans."

Finally, both my wife and I have corporate discounts through our respective companies.

So, every time I research a plan, the sales rep has to go through an online rigamarole to find out what the applicable discount is, what's covered ("activation charge"), what isn't (hardware), etc.

Phew!!

Paralysis

Having navigated all the foregoing, whenever I'm just on the verge of replacing my Treo -- which still works pretty well, by the way -- there always seems to be "something new," just around the corner: a more generous calling plan; another "latest and greatest" phone about to make its debut; some new "killer app" or software.

In the last month, that would be 'Droid," the would-be "Linux" of the cell phone world (an open, non-proprietary platform pushed by Google and others).

There are probably a couple other considerations as well . . . but you get the idea.

In fact, the software industry long ago discovered the paralysis-inducing effect of promised, new products, and coined the term "vaporware" to describe rumored, new products or upgrades whose sole purpose is to keep would-be competitors' customers on the sidelines.

Mastering Today's Housing Market

Substitute "tax and finance" for "technology," and how much different is all this really than the housing market confronting prospective Buyers today?

For at least two years now, buying a home involves explicitly weighing many (if not all) of the following variables:

--current tax incentives (federal, state, & local);
--possible future tax incentives (federal, state & local);
--risk of home prices falling further;
--risk of home prices increasing out of one's reach (a real consideration for entry-level Buyers);
--one's credit scores and eligibility for a mortgage;
--direction of interest rates;
--the risk that the home one selects won't appraise;
--economic outlook, and in particular, one's job security;
--direction of property taxes (and inheriting an inflated property tax bill for the first year or two).

One more time: phew!!

In my experience, most of my Buyer clients today are much less focused on making a killing than on avoiding getting killed.

If the housing industry really wants to attract more Buyers, reducing the number and complexity of the variables they need to consider would be a good start.

Edina Realty's '09 Annual Meeting

Surviving the Shakeout

Edina Realty held its annual meeting for its 2,500-plus local Realtors today at St. Paul's Xcel Center.

I couldn't catch all of it -- clients come first -- but what I saw was a combination pep talk, unusually frank discussion of today's brutal market, and an emotional presentation by Bob Peltier, Edina's President and CEO.

Peltier, who along with his brother, Ron, effectively runs the company, suffered a serious stroke last May. He compared his recovery to the challenges facing Realtors today: everything comes harder, takes more effort and persistence, and above all, requires a positive attitude.

The sombre mood was a reflection of today's market. While "Pending" sales are up for the first time since 2004, the increase is largely due to foreclosures: now about 40% of all transactions locally.

As Realtors know only too well, such deals are a tough way to pay the rent: imagine spending several months on an especially thorny deal and walking away with a commission check for, say, $1,500 (before taxes!). You can make that kind of money at McDonald's -- and not have to work nights and weekends for it. You wouldn't even be sacrificing your health insurance. (Realtors pay for their own.)

Clearly, such challenges have taken their toll on Edina's head count, not to mention morale: the company shed 700 realtors, dozens of support staff, and four Twin Cities offices in just the last year.

Notwithstanding these travails, Edina Realty's Minnesota operations still managed to report a profit in 2008. Oh, and no one in management is begging the government for a bailout.

If only the country's banks could say the same . . .