I admit, I hadn’t heard of the Circling Vulture Blog before Ms. Martin asked me about it, but after a few clicks I knew that I was in love. Didn’t know how I could have missed it, but I’ll tell you that I’m sorry I had. Piss off an entire town’s worth of real estate agents? Kudos my friend, kudos! Reminds me of some of the enemies made during the early days of this blog, when we ran under the “Northern New Jersey Real Estate Bubble Blog” title. I sure miss some of the battles we fought back then.
One of the primary reasons for starting this blog back in 2005 was because of the lack of access to real estate data. Market and property information, critical to a buyer, were closely guarded by the real estate industry and only doled out in carefully calculated servings, and even that rare. As a buyer during this period, this refusal to open up market data to the public infuriated me. The reason was simple, information asymmetry, the party with less perfect information in any market is more likely to be on the losing end of a transaction. This was especially important during the Summer of 2005, when the New Jersey real estate market began to deteriorate. Market statistics began to show a weakening market, an alarm bell for both buyers and sellers. Instead, the industry continued to spin, ignoring the negative data and instead only focusing on those dwindling indicators still left showing some signs strength. Just as I’m accused of cherry picking today, the real estate industry cherry picked overpriced sales during the 2006 market in order to continue the cheer leading. The result? Agents persuaded buyers to pay more for properties than they could afford, planting the seeds of the mortgage crisis. Likewise, agents convinced sellers to hold on to exorbitantly high asking prices, while the market fell apart around them, leaving them unable to sell. The goal was simple, do whatever necessary to maintain the illusion of rapidly rising prices.
When I came across C.V.’s comments on Zillow, it reminded me of just how critical that market information is. Realize folks, this uproar by Short Hills real estate agents isn’t because of a few snarky comments, it’s because someone is making data available to the buyers. Once the data is public, it becomes impossible to use that data to persuade buyers. Just look at the outrage caused by someone making a few numbers public? Just as the financial media today talk about transparency being necessary for a functioning market, these agents would prefer to operate in their own mark-to-myth world where only they know the state of the market, and can profit from that.
Just a quick aside regarding the hacker label, I assure you it was nothing of the sort and a bit of the story was lost in translation (my fault, no doubt). As a geek who grew up watching War Games, while the title is one of nerdy honor, I lack the skills necessary to pull off such a feat. Oh I admit, I could get into the role of a spandex-clad Robin Hoodesque super hero stealing information from the evil real estate empire and providing it to the poor, the reality is much less romantic. Someone inside (whether at the MLS, or at the company that writes the software) had set up a set of web links that simply wouldn’t ask you to log in. Not really hacking at all, I mean, they just never asked you to log in. The links were available to the public and were widely know before I came onto the scene in 2005. Unfortunately, for the public, they no longer exist. When you read that paragraph, I’ll ask that you use an alternate form of the definition, “one who is technically proficient at solving problems”, where the problem is lack of market information and transparency. I never intended to become a real estate agent when I got my real estate license.. I did it so that I could gain access to that data, and make it public here for other buyers like me. Of course, after 3 years immersed in the world of real estate, I realized that I could provide a service and a sense of trust that many buyers find valuable.
Ok, maybe it wasn’t so quick at all, so back to the point. Information. This kind of data is critical to a well functioning market. Sidelined buyers are refusing to get into the market because they no longer trust the market and it’s participants, and rightfully so. The real estate industry threw buyers under the bus over the past few years. Sure, you can blame the bankers, the lenders, and Wall Street, but I don’t think there is enough blame being put on real estate agents for facilitating the mania that precipitated this crisis. When I say there is a strong anti-Realtor trend developing, I mean it. Fixing the very broken real estate market is going to require rebuilding trust and enhancing market transparency, and this means visibility into numbers. Spin and manipulation will not fix the market, sellers and buyers do not need to be lied to. All this does is extend the pain, longer than necessary, as the industry tries its damnedest to keep the market from finding it’s natural bottom.
Kudos to CV for pissing off the Realtors. Well done!
From the NY Times:
A ‘Vulture’ Preys on Short Hills
In the Region | New Jersey
By ANTOINETTE MARTIN
Published: February 13, 2009
THERE is a Circling Vulture casting its shadow over Short Hills real estate — virtually speaking, at least.
Last spring, a blogger by that name set up a nest at the real estate Web site Zillow.com, and started posting reports about declines in asking prices and unraveled deals. Short Hills is a community where such things were once unheard of (and still are not much spoken about, at least by real estate agents promoting properties for sale).
The Vulture has his facts straight, according to those who know — that is, the licensed brokers with access to multiple-listing-service data.
But several agents from Short Hills insisted in telephone interviews that the mysterious C.V. presents a warts-only picture of the local market, which is actually “slow, but not dead,” as Marc Paolella, a Century 21 broker and appraiser, put it.
Furthermore, declared Karen Eastman Bigos of the Towne Realty Group, “this C.V. person is just plain mean” toward real estate professionals.
The blogger — who did not reveal his or her identity, or comment for this article — indisputably employs a mocking tone. Written under a picture of a buzzard on the Web site is the motto “Capitalizing on the greed and stupidity of others.” In the Q. and A. section of the site, C.V. tartly advises home shoppers, “Remember: always offer full asking price so as not to ‘insult’ the seller.”
Such snarkiness is emblematic of a rising “anti-Realtor movement,” said another blogger about New Jersey real estate, James Bednar. Known online as Grim, Mr. Bednar blogged about the real estate “bubble” before it burst, and currently provides gimlet-eyed market commentary at njrereport.com.
“This provides counterpoint to the entire spin of the real estate industry,” he said after a look at the Vulture’s work.
Mr. Bednar said he began blogging after becoming disillusioned during a house hunt in Montclair in 2005 and 2006, when bidding wars would break out on houses with already inflated asking prices.
Several Short Hills brokers theorized that C.V. is motivated by spite, perhaps stemming from a bad experience trying to buy into one of New Jersey’s most exclusive communities.
Short Hills, part of Millburn Township, is a well-established haven for the well-heeled. For decades it has been popular with Wall Street professionals, because of its easy train commute to Manhattan, not to mention the fact that it offers top-rated schools and a glittering temple of fashion, the Mall at Short Hills.
Of course, Wall Street is not supplying as many well-heeled buyers these days. It is still too early to judge the extent of the impact on the Short Hills real estate market, analysts say.
So far, median home prices have fallen about 15 percent since the boom times of three or four years ago, according to Mr. Paolella. But Ms. Bigos, who has been selling real estate in Short Hills for 24 years (following in her mother’s footsteps), conceded that the last quarter of 2008 was “by far the worst” that she had ever seen.