News Corp. to buy parent of Realtor.com for $950 million

As an agent with mixed feelings about Zillow’s power in the real estate market I am curious to see how News Corp’s branding muscle will factor in.

la-et-ct-rupert-murdoch-time-warner-fox-201409-001

Rupert Murdoch’s News Corp. announced a $950-million deal to buy Move Inc. and its real estate listing website Realtor.com. (Justin Sullivan / Getty Images)

Courtesy of Tim Logan at latimes.com

Rupert Murdoch’s News Corp. announced Tuesday a $950-million agreement to buy the nation’s third-largest online real estate listing company, Move Inc., marrying the parent company of the Wall Street Journal with the Realtor.com website, which drew 26 million would-be home buyers last month.

It’s a bid to help Murdoch’s publishing company diversify in the wake of its split from 21st Century Fox. It’s also a bid to create a viable competitor to online real estate giants Zillow and Trulia, which are themselves merging.

The online real estate business is growing fast as agents and brokers shift ever greater chunks of their $14 billion in annual advertising dollars away from print and into data-rich digital and mobile platforms. That spending, though, is scattered across hundreds of local and national sites, and if big portals like Move’s Realtor.com can consolidate it, there’s profit to be made, News Corp. Chief Executive Robert Thomson told analysts Tuesday.

“We believe there is a massive market opportunity in the U.S. for online real estate revenue,” he said. “This market is in the early stages of development.”

The same thinking is driving Zillow and Trulia, which in July announced plans for a $3.5-billion merger designed to give them a big slice of the advertising pie. Both sites long ago surpassed Realtor.com in traffic, and combined drew nearly four times as many unique visitors last month as Move’s network, according to online data service ComScore.

The National Assn. of Realtors gives Realtor.com up-to-the-minute access to nearly all of the country’s multiple listing services.

But Move’s Realtor.com is still the third-busiest site by far, and it has a big asset in its long partnership with the National Assn. of Realtors. The industry’s biggest trade group gives it up-to-the-minute access to nearly all of the country’s multiple listing services — providing for more accurate listings, says Move Chief Executive Steve Berkowitz — and a strong brand name to boot.

The deal with News Corp. will provide back-office support and the expertise of News Corp.-owned REA Group, the leading property website in Australia. It will also give Realtor.com a broad marketing platform on the Wall Street Journal’s digital network, which averages 500 million page views a month.

“We intend to use our media platforms and compelling content to turbo-charge traffic growth and create the most successful real estate website in the U.S.,” Thomson said. “We certainly expect this deal to amount to far more than the sum of its parts.”

It will be a tall order for the News Corp.-Move tie-up to match Zillow and Trulia in the marketplace, said Brian Boero, who tracks the online listing business at consulting firm 1000Watt in Oakland. But the company is expected to be strong enough to survive as a viable competitor.

The real success of the deal will come down to how well News Corp. is able to manage the agreement with the National Assn. of Realtors, which provides Move with its competitive advantage but has at times also blocked innovations — such as the home value estimate that powered Zillow to its early prominence.

“[The partnership] is their greatest advantage and their greatest weakness in the same breath,” Boero said.

For its part, the Realtors Assn., which has voiced concerns about the Zillow-Trulia merger, said Tuesday that it supported the News Corp.-Move deal.

It ought to, said Steve Murray, president of Real Trends, a real estate research and consulting firm in Castle Rock, Colo. Teaming up with one of the biggest names in business media should help broaden the reach of Realtor.com, he said, and give agents some leverage should the combined Zillow and Trulia try to flex their marketing muscle.

“This will increase and enhance competition,” he said. “That’s a very positive thing.”

Chinese investors remain an X Factor for the US housing market

Courtesy of Richard Green at housingwire.com

This year, for the first time, the Chinese surpassed Canadians as the top investors in American residential real estate. According to the National Association of Realtors, during the 12-month period that ended in March, investors from China (Mainland China, Taiwan and Hong Kong combined) invested $22 billion in the U.S. housing market. Canadians, the perennial leader in foreign investment, spent about $13.8 billion.

While this upsurge was difficult to predict, the Chinese have good reason to invest in U.S. real estate, and the impact is being felt in the California, Washington and New York markets, where more than half of China’s investment dollars have gone.

On Nov. 14, the California Association of Realtors will convene economists, policymakers and practitioners for The Real Estate Summit: Partnering for Change in California. Among other things, the summit will explore both the motivation and impact of foreign investment in California’s residential real estate.

While it may come as a surprise to many in the American housing market, Chinese investors consider the U.S. market and even the coastal cities of California to be relatively inexpensive.

Compared with incomes, housing is expensive throughout China, and in the cities of Guangzhou, Beijing, Shanghai and Hong Kong/Shenzhen– where the combined official population of 75 million is equivalent to roughly 25% of the U.S. population – is far more expensive than desirable California markets like Los Angeles, San Francisco and San Diego.

In fact, a wealthy buyer from China can look at even the most expensive California markets like San Marino and think, “I can get a lot of house there without spending a lot of money.”

Price is not the only attraction. In many countries – Russia, Brazil and, indeed, China – successful business people feel threatened by arbitrary government behavior and have an incentive to get their money out of the country. The U.S. housing market offers consistently enforced contracts and transparency. When you consider that many foreigners aspire to send their children to an American college, buying a house here becomes a no brainer. USC, UCLA and Stanford are filled with examples.

So what does this mean for homeowners and buyers?

In markets like Indianapolis, Columbus and Kansas City, the impact is negligible.

Most Chinese buyers are shopping with cash and doing so almost exclusively in California, New York and Washington, while Brazilians and other wealthy South Americans tend to buy in Florida. In those states, they are having an impact.

Cash buyers from other countries might be seen as a threat to domestic homebuyers in these states. These buyers must apply for a mortgage at a time when lending standards are tightened and approvals are slow.

While $22 billion in Chinese investment in U.S. housing sounds like a large number, it is actually rather small: in a typical year, the total value of residential real estate transactions in the U.S. is around $1 trillion. But foreign buyers do have a large impact on specific markets, pricing some domestic buyers out of the market, but also bringing welcome relief to coastal California homeowners stuck in upside-down mortgages.

In the Bay Area, roughly 25-30% of mortgages were underwater five years ago. Thanks in part to foreign buyers (and investors), home values have rebounded and creating positive equity. As a result, the percentage of underwater mortgages in the Bay Area today is nearly zero. Yet the Bay Area also faces an affordability crisis.

What remains unclear is how much more capacity Chinese investors have to influence housing in the U.S. There is no Chinese version of IRS data that tell us how deep this well of investors might be. If it turns out there are only 100,000 Chinese able to invest in American real estate, then the end of this cash influx will come to an end soon. If there are 15 million, then this could go on for a long time.

The Most Valuable Monopoly Property Isn’t The Boardwalk

monopoly-hotels-2

While a little lighthearted I found this article to bring up an interesting point. What exactly indicates a ‘good’ location?

When showing properties in a client’s price point I show them in order of most attractive (tree-lined, quiet, based on personal needs) to perhaps not considered the most attractive (close to utilities or freeway, directly under airports, etc.) so they have an understanding of everything in their range. However in the bay area real estate in general is “good”. Home prices have been higher and locations more sought-after than almost any other region in the US since data began being collected half a century ago. The investment has proved sound if not staggering despite the usual market ups and downs. So we realtors should never act as arbiters of what is “good” and what is not.

Once again the notion that the bay area’s real estate “game” is played a little differently than any other in the country.

—————————————————————

Courtesy of BusinessInsider.com/lenpenzo.com

When playing Monopoly, the conventional wisdom is that the best property to own is Boardwalk because it commands the highest rent.

However, savvy players know the most valuable property is actually Illinois Avenue. How can that be?

Well, one of the biggest reasons is that Illinois Avenue’s board position — two “seven” rolls from Jail — gives it the distinction of being the game’s most-landed on property; Boardwalk is ranked fourteenth.

The bottom line: When buying real estate, the three most important factors are always location, location and location — regardless of whether you’re paying for it with Monopoly money or real cash.

Rental home shortage is America’s next housing crisis

Courtesy of soberlook.com, June 22, 2014

The US is facing a new housing crisis. No, it has nothing to do with subprime mortgages or bloated home equity balances. This time the nation is dealing with shortages of rental housing, a problem that will become increasingly acute in years to come and may result in a material drag on economic growth.

Americans are simply not building enough homes to accommodate the population’s needs. The number of housing units completed per capita in the United States remains a fraction of historical averages. The slight improvements from the lows of 2011 have barely scratched the surface.

Units completed per capita

Similarly, in spite of recent increases, residential construction spending as a fraction of the GDP remains at the lowest levels than at any time since WWII.

residential construction spending as percent o gdp

At the same time demand has been on the rise. As an indicator, the chart below shows Google search frequency for rent related phrases.

Google Apartments & Residential Rentals index

To read the full article go here.

Redfin Survey: 40% of Home Sellers Plan to Price Higher Than Market Value

Courtesy of Redfin.com, 5/8/2014

SEATTLE – May. 8, 2014: 

Home sellers are kicking off the spring real estate season with what might be considered a risky pricing strategy: 40.3 percent say they plan to price their homes above market value, according to the latest Real-Time Seller Survey from Redfin (www.redfin.com), the technology-powered real estate brokerage. Redfin agents warn against this pricing strategy, as it usually doesn’t pay off for sellers.

“Buyers this year are far less tolerant of overpricing, and homes that aren’t priced appropriately are likely to sit on the market until the seller is forced to reduce the price,” said Redfin Riverside area agent Paul Reid. “Buyers often interpret a price drop as a sign there is something wrong with the home, leading some to negotiate even more aggressively or lose interest altogether.”

More than half (51.3%) of home sellers surveyed said they plan to price their home in the middle of the range based on local comparable sales, which is wise considering that a home listing gets nearly four times more visits on real estate websites during the first week on the market than it does a month later, according to a Redfin analysis.

“Pricing a home correctly from the start is a critical component of Redfin listing agents’ strategy, and we use the very latest local comparable sales to create our pricing recommendations,” said Karen Krupsaw, vice president of Redfin real estate operations.

In the second quarter, 52.4 percent of sellers were confident that now is a good time to sell their home, compared with 37.5 percent in the first quarter. Nevertheless, home sellers are not free from worry. In the second quarter, 40.9 percent of sellers said they are worried about being able to afford their next home. For the survey, Redfin polled 1,128 active home sellers across 26 U.S. cities.

Whether people are buying or selling, it’s always critical to take the time and space to make the right decision to avoid home buyer’s remorse. According to a nationwide survey from Redfin and conducted online by Harris Poll among more than 2,000 U.S. adults, one in four American homeowners (25%) who bought the home they’re currently in said that they would not buy their home again if they had to do it all over.

The Redfin Real-Time Home-Seller Survey is a companion to the quarterly Buyer Survey and Agent Survey. Click here to view the full report, including charts and graphs. Additional data is also available by contacting press@redfin.com.

About the Q2 2014 Redfin Real-Time Seller Survey

This survey was conducted between April 15 and 18 and survey respondents included 1,128 active home sellers. Respondents spanned 25 metropolitan areas in the U.S., which are: Atlanta, Austin, Baltimore, Boston, Chicago, Charlotte, Dallas, Denver, Houston, Riverside-San Bernardino, Las Vegas, Los Angeles, Miami, Minneapolis-St. Paul, New York area (Bronx, Long Island, Queens and Westchester), Orange County, Philadelphia, Phoenix, Portland, Raleigh-Durham, Sacramento, San Diego, San Francisco, Seattle and Washington, D.C.

$1 million for that?? You don’t get much house in the Bay Area for $1 million, says Trulia

Courtesy of SiliconBeat.com, 4/3/2014

The tech boom has pumped up Bay Area real estate prices so much that $1 million will get you a fixer-upper — if you can find one.

OK, that may be an exaggeration, but not by much. In Palo Alto, $1 million gets you a nice condo. Over-asking price bids on homes priced at more than $1 million are common in other hot spots like Cupertino, Sunnyvale, Mountain View and Menlo Park.

The online real estate site Trulia has analyzed this, coming up with the following: In San Francisco, the Peninsula and the East Bay, 43.5 percent of the homes for listed sale are priced above $1 million. In the South Bay, 23.7 percent are.

In “pricey” U.S. markets like the Bay Area, “you’ll need more than a ‘one’ in front of six zeros to buy a mansion,” Trulia chief economist Jed Kolko reports.

The typical million-dollar home is 1,489 square feet in New York City; 1,774 square feet in San Francisco and the East Bay; and 2,161 square feet in the South Bay.

But in 68 of the 100 largest metro areas, $1 million homes are less than 5 percent of the total market. In Colorado Springs, $1 million gets you 6,023 square feet. In El Paso, it gets you 6,908.

“That means the differences in million-dollar homes across the country are so big, you could actually fit million-dollar properties from New York, San Francisco, Honolulu, and Miami together inside a million-dollar mansion in Birmingham and still have room to spare – that is, if you couldn’t find any better use for 8,000 square feet,” Kolko writes.

Bill Gates: It’s OK If Half Of Silicon Valley Startups Are “Silly”

Successful startups lead to successful buyers and sellers, and so we think this article is spot-on. Bill Gates

Courtesy of www.techcrunch.com, 3/15/2014

Microsoft Founder Bill Gates doesn’t worry that Silicon Valley is the home of billion-dollar texting apps and farming games. “Innovation in California is at its absolute peak right now. Sure, half of the companies are silly, and you know two-thirds of them are going to go bankrupt, but the dozen or so ideas that emerge out of that are going to be really important,” Gates told Rolling Stone, in a wide-ranging interview on government surveillance, financial inequality, immigration reform, and the cultural backlash against Silicon Valley.

Gates’ sentiment is a nice to response to a New York Times spread that lambasted Silicon Valley investors for encouraging their brightest minds to work on solving the problems of yuppie 20-somethings.

“Why do these smart, quantitatively trained engineers, who could help cure cancer or fix healthcare.gov, want to work for a sexting app?”, asked writer Yiren Leu in the aptly titled “Silicon Valley’s Youth Problem”.

It’s important to keep in mind that many of the technology industry’s most impactful companies were originally targeted at the recreational lives of (relatively affluent) users. Facebook was built to help ivy league college students share fun photos. Today, Facebook significantly boosts voter turnout, organ donation, and broadband access in developing nations.

To see the full article go here.

Bay Area Home Sales Drop, Prices Rise

HOUSING 031414Courtesy of www.siliconvalley.com, 3/13/14

Where are all the houses for sale?

That’s the question that homebuyers and their real estate agents are asking, as a report Thursday showed February home sales hit a six-year low around the Bay Area.

While factors ranging from credit to affordability can depress sales, “the main culprit is an inadequate supply of homes for sale,” according to real estate information service DataQuick.

While prices jumped, sales of single-family homes dropped an average of 10.5 percent around the nine-county Bay Area, with dips of 15.3 percent in Contra Costa County and 19.5 percent in Alameda County, DataQuick reported. Santa Clara County held its own with a 1.9 percent gain, while San Mateo County was up 8 percent.

Read the full article here.

Dream Home Inspirations We Love

With Valentine’s Day approaching we thought we’d share the home inspirations (practical and otherwise) that we love. An indoor treehouse, staircase slides, desk sandboxes and more.
Things We Love for Homes

For the complete showcase of 33 Awesome Home Ideas, go here.

Courtesy of ViralNova – www.viralnova.com