David Leonhardt has a terrific column in yesterday’s NYT that hits upon many of our favorite themes:
Real Estate sellers (like other humans) are often irrational;
Price "Anchoring" occurs with many investors;
Here’s what we wrote back in September 2007:
"Prices have slipped, but not nearly enough to eliminate the inventory. This has lead the usually cheerleading folks over at the N.A.R. to yet again lower their forecast for 2007 existing-home sales for the seventh-straight month. The real estate agent trade group is now predicting a drop of 8.6 percent in home sales versus last year. And, they expect new-home sales will fall a whopping 24% to 801,000 this year, and to 741,000 next year.
Prices have failed to come down enough to jump start more activity. Sellers have been stubbornly sticking to their imagined top tick prices of 2005. Thus, Supply remains high, and if we believe the NAR or OFHEO, prices have slipped only slightly. Econ 101 informs us that until prices fall appreciably, the inventory situation will not improve.
There is a psychological component to all this: It very much reminds me of the investors who when having missed selling Amazon at $400 and Yahoo at $200 and EMC at $80 and Cisco at $60, refused to take 10% less. So they ended up riding the stocks all the way to multi year lows.
Speaking of the NAR, we continue to note their counterproductive cheerleading. Over a year ago, we noted a group of Palm Beach Real Estate agents blamed the NAR for putting unrealistic expectations in the minds of sellers:
"A growing number of Realtors in Florida are frustrated with the state and
national Realtors groups’ efforts to ‘spin’ the market as one that is
strengthening and where home prices are stabilizing.
"Many (though probably not yet most) Realtors are frustrated by customers who
continue to list their homes at price levels that are ‘unrealistic,’ and as a
result, sales volumes – and thus commissions – continue to remain depressed.
"While Realtors have noted to customers that many home builders in Florida
have slashed new-home prices in order to move bloated inventories, many home
sellers are still holding off, hoping – along with FAR and NAR – that prices
will start moving back up soon."
courtesy of NYT
Real Estate Inventory Still Building http://bigpicture.typepad.com/comments/2007/09/real-estate-inv.html
Quote of the day: Realtors Get Real http://bigpicture.typepad.com/comments/2007/03/quote_of_the_da_1.html
Be It Ever So Illogical: Homeowners Who Won’t Cut the Price
NYT, March 26, 2008
How Easily Can Your Brain Be Fooled? http://bigpicture.typepad.com/comments/2007/01/how_can_your_br.html
The Psychology Behind Common Investor Mistakes http://bigpicture.typepad.com/comments/2005/07/the_psychology_.html
Yesterday, I noted how pokey and bug laden the videos are on CNBC.com, saying "I sure wish CNBC would get hip to embeddable flash media, like
BrightCove. The klunky old windows media players crash all the time. (I
don’t understand why they went with this 10 year old technology)."
At least CNBC — crash-prone, buggy, ugly and slow — will play on a Mac.
The Bloomberg video — also crash-prone, buggy, ugly and slow — is Windows only! I can play the video, but not the audio, on a Safari or Firefox browser for OSX.
And speaking of bugs, Bloomberg is the one of that odd collection of web based video that can’t/won’t be captured by a screen grab on a Windows machine. That means that any Bloomberg video you see here (like this one) is the result of watching and coding it on a Dell in the office, than grabbing the (silent audio) video part on the Mac at home, and combining the two.
Don’t you want people promoting your brand and your content?
Its not like Bloomie doesn’t know what embeddable flash is — if you go to this page, their promotional video is not WMP — its flash based! No loading delay, no glitches, just straight up video.
Hey Bloomberg.com & CNBC.com:
You folks are paying for the shooting, editing, storing, hosting and bandwidth usage of all this video. I assume you actually want people to see it — to sell subscriptions, to roll adverts, to brand your product. You are spending all of this money for a product that sends people running in the opposite direction.
Every time I post a video from either of your sites, I get email telling me it crashed their browser, or even worse their computer. It is slow, ugly and to be blunt, unprofessional. Your online video product is in fact damaging your brands. (CNN/Money’s video auto roll is another bit of annoyance, but we’ll save that for another day).
Of all the major Financial media that run video, only WSJ and NYT seem to have gotten it right.
Um, its 2008. Can we get with program? The embeddable flash video is circa 2006. Can you find it
in your business models to only be 2 years — not 10 — behind the
technological adoption curve?