Are bubble bloggers crazy or ignorant?
Bubble Blogs are sites devoted to discussing trends in real estate that point to the existence of, the creation of and/or the bursting of a real estate bubble locally or nationally. These sites are often misunderstood as being hate mongerers (although the language choices may be quite strong and comments are not moderated and get very heated) and are often accused of being ignorant and I would strongly argue otherwise.
I’ve been reading bubble blogs for a while now, and there is even a bubble blog being born in my very own city which a year ago would have made me nervous. Today, I am writing to encourage you to pay attention to bubble blogs. Why? Well before you call me the crazy old cat lady, let me tell you- reading these sites has given me a new perspective, namely because they don’t always talk doom and gloom and some of them are better informed than you could ever imagine- they can be a fountain of information, regardless of how you feel about their personal/consumer analysis.
Eternally defensive of Realtors.
I am an optimistic person and the NAR talking points feel good to me (although I’m not a Realtor rather a marketer), and I am eternally defensive of the real estate professional. On the other hand, I’ve learned a great deal of information from the bubbble blogs and commentary within that I would never have (nor should) read on a professional real estate blog. What turns people off is the tone in which these sites often take but when you filter out the tone, there can be diamonds in the rough in the form of manually created charts of economic stats, uncovering of local sources that have remained silent or dig up videos about how foreclosure bailouts impact homeowners.
Clocks being right and such.
In 2005, 2006 and even 2007, bubble bloggers screamed doom in their various markets and real estate professionals stood up and said “NO” to their markets being in trouble. Now that the markets are crumbling like cheap single ply toilet paper, the bubble heads are relishing. As with any history lesson though, we must remember that a clock is right at least twice a day- NAR talking points will be right sometime as will bubble analysis.
Transparency is unavoidable.
The movement toward transparency can be reached at any level now, be it regarding local real estate bubbles or be it marketing stats from Altos or in lending via RateSpeed and can no longer be ignored as the consumer has and will continue to demand it.
Are you living in a bubble?
Sales is all about overcoming objections and if a real estate agent doesn’t take the time to study what the objections of the consumer are and learn what their perspectives are (which are expressed through sites like bubble blogs), then you may be demonstrating a disconnect between what they perceive as reality via their own research and the reality your local market. If you as an agent are ignoring these sites, then a critical opportunity is being missed and you may be perceived as living in a bubble, ignorant to those outside of it and unaware of the results of their own research, costing you a loss in your marketshare.
You’re insane.
No I’m not, I enjoy reading all different perspectives and I take in a lot of material on a daily basis. Even today, Seattle Bubble published a manifesto of sorts which may help you understand where they’re coming from. Paper Economy gives a bubble history lesson today which is an interesting read, and Bubble Meter analyzes the doom and gloom for 2009 (but take special note that although the negative is highlighted, the final analysis is that this is NOT another Great Depression and that mainstream media personalities are freaking the public out for no reason).
Don’t fear them, embrace them.
So, if you haven’t, take another look at the Bubble Blogs and if you look at the core of their message, you might agree with them more than you ever thought you could. This is how agents could embrace and use these bubble blogs to their advantage:
- Read local bubble blogs.
- Introduce your consumer to the bubble blog.
- Talk about these issues that consumers are raising.
- Correct misinformation and affirm information that is correct.
- Engage the conversation head on on your own blog.
- Don’t get caught up in the rhetoric, simply engage the conversation.
Consumers are looking for this information and they WILL find it. This is not a bridge that needs to be on fire, it can be cultivated, understood and wielded as a tool.
Tom Vanderwell
November 11, 2008 at 12:33 pm
Lani,
You’re right. Education and understanding are much more important now than they have been in a long time.
Tom
MarketingTexan
November 11, 2008 at 12:38 pm
Great Article on the bubble blogs. I have to wonder what bubble blogs you are referring to that are not all hype or pointing out the obvious. I would really like to see the ones that aren’t all hype and a bit more newsworthy truly transparent.
Elizabeth
November 11, 2008 at 12:53 pm
Hey Lani, thanks for tip on bubble blogs! Just curious…what is the new bubble blog emerging in your city?
Thanks again for the great content you always provide!
Benn Rosales
November 11, 2008 at 1:15 pm
@Elizabeth it hasn’t launched just yet, we’ve only seen the job ads for writers specific to an Austin bubble blog.
@MarketingTexan there are examples within this post right now, and the issues of hyperbole are addressed, and hyperbole doesn’t negate the point of the post that agents can engage a greater conversation, correct misinformation within their own markets, correct perception when incorrect, and affirm realities and overcome them with new information when possible as was pointed out in the article – it’s a tool.
Ron Ares
November 11, 2008 at 2:06 pm
Depending on your comfort level, you might engage bubble bloggers in a casual meetup (i.e. pub, etc.) for a little face-to-face discussion.
It happened here in Portland a few months ago and while it felt like I was walking into the lion’s den, I found the conversation more congenial and substantive than usually found online.
The real flame-throwers stayed home (lest their anonymity be compromised) so the respect level stayed high, too.
The Tim
November 11, 2008 at 2:10 pm
I can’t speak for all the other “bubble bloggers” out there, but I know that in the case of Seattle Bubble, while it started as a site to explore the local real estate bubble, it has since “evolved” into providing more general news and analysis on the local real estate market.
It’s nice to see people in the real estate industry recognizing the hard work many of us “amateurs” are putting into understanding what’s going on in the market. Thanks!
St. George Townhomes
November 11, 2008 at 2:31 pm
I think there is a reason to have every type of blog. There are a lot of realtors who are defensive and that does show that they are standing up for themselves. If they do stand up for themselves then that shows that they have confidence in what they provide. The more blogs the better.
Steve Simon
November 11, 2008 at 2:34 pm
Had never known of their existence…
I will make an effort to add some to m list of reading.
“The truth may be upsetting, but it cannot be avoided for long!”
teresa boardman
November 11, 2008 at 2:46 pm
I have been reading bubble blogs for years. They do help me understand how others think and some have great information on them.
Lani Anglin-Rosales
November 11, 2008 at 2:49 pm
@Ron- that is extremely encouraging! I think it’s great advice also and is a smart way to bridge the gap.
@Steve- that’s a great quote and highly applicable here. I bet you agree that knowing all angles makes you a better professional…
Also, I want to note that like Ron noted, sometimes real estate professionals are welcomed into the bubble (Jim Duncan is a great example of a possible outcome with bubble bloggers proving it isn’t all doom and gloom and Realtor-hating).
Mauricio Pina
November 11, 2008 at 4:02 pm
Great post. Great site.
Sarah Nopp
November 11, 2008 at 4:03 pm
I agree with Theresa. I like to read the bubble-stuff too. Even Craigslist has some pearls from time to time. And if I feel there is too much hate going on, I just move on to somewhere else with more substance and less flame.
There really is nothing new under the sun, just new ways of appreciating it. (I love that point about the stopped clock too!)
Geordie Romer
November 11, 2008 at 5:19 pm
I’ll bet most real estate bloggers have a bubble blog or two in their feed reader. I read every post on the Seattle Bubble Blog. I think the data and observations are great. I don’t comment very often because of the pitchforks and torches that the villagers have at their disposal, but I enjoy lurking.
monika
November 11, 2008 at 6:11 pm
I’ve been reading for a few years now mainly for the reasons you sited. I don’t think they are at all scary even though sometimes they are a bit off the wall. I find it interesting reading.
Lisa Sanderson
November 11, 2008 at 10:08 pm
I never heard of these before but they are now in my reader. Thank you for sharing.
Missy Caulk
November 11, 2008 at 10:20 pm
Ditto me, Lani. I have never heard of bubble blogs, but I took a peak at the Seattle one, and can see it would be beneficial to hear what they are saying. But, most Realtors I know never agreed with the NAR hype on the market anyway.
Ned Carey
November 11, 2008 at 10:29 pm
I saw this post on another site and clicked through because of the title. I was thinking that a bubble blog would have to be about two years behind the times.
But you are right when I have visited one they do seem to have good stats. Thanks for the tip, I’ll be clicking thorough to some of the ones you mentioned.
Jim Duncan
November 12, 2008 at 6:12 am
My local bubble blog rocks. When they first appeared several months ago, I reached out to them (they’re anonymous) and worked to develop a relationship. They have some outstanding analysis and commentary, and has become a real resource in the community.
Don’t be afraid of ’em – contact them, embrace them. Understand there is a lot of vitriol disdain that may have to be worked through on some of the blogs. But when you boil it all down, we all want a sound economy.
Mike Mueller
November 12, 2008 at 8:06 am
I have a folder in my Feed Reader just for the Bubble. It sits right next to the “FUN” folder.
It’s not just the Bubble Blogger, it’s not just the bubble commenter, it’s each and every single reader who happens to come by and see that you are a RE professional and a voice of reason.
If I was a reader of a Bubble Blog (and a potential buyer / seller), would I want to use a “It’s a great time to buy” Agent or one that has exhibited that they do understand the changing marketplace?
Good stuff Lani!
Derec Shuler
November 12, 2008 at 10:27 am
It’s definitely worthwhile to various perspectives on the market. NAR talking points seem out of touch with reality at times and it’s good to know what other people are thinking (and your clients may be reading).
Steve Simon
November 12, 2008 at 3:51 pm
@Lani, afterspending the time I did as the chair of a County with a billion dollar a year budget, I learned this:
“You will learn more from substantive negatives views and failure in general than you will from most easy wins!”
The loss or negative gives you a much more spefic area to shore up or outlines a position you must gravitate to in order to be better.
Karen Highland
November 12, 2008 at 4:15 pm
I read the bubble blogs regularly, but I have to be in a rare tough-skinned mood to make a comment…villagers with pitchforks is an excellent word picture;)
Paula Henry
November 12, 2008 at 9:44 pm
The one premise the bubble bloggers cling to that I absolutely abhor, is the fact, it is all Realtor/agents fault the housing market is suffering.
I have personally counseled several clients “not to buy” in a particular area where the market was too hot and prices inflated. Others, I have simply told it may not be the best time for them, or the best loan.
When I was in Phoenix and California, I said time and again, the economy could not sustain the appreciation of real estate values. Yet, we are bashed over and over for inflating values.
Other than that, I do read the bubble blogs and learn from their perspective. I do not agree with the “It’s a great time to buy” general blanket statement made by NAR and some companies. It is not a great time to buy for everyone.
Linsey
November 13, 2008 at 12:05 am
Ironic that I read this post today. This morning the Orange County Register had our local Bubble Blogger on the front page. He’s been around for a while and with an engineer background – he’s got some wonderful stats to support his arguments.
There’s no question that there is value in understanding all the viewpoints that come from analyzing local trends and statistics. We don’t always read the info the same way. But to fail to be educated about all of the available information is to bury our heads in the proverbial sand. And in today’s market – that’s the last thing a client wants to hear from their Realtor.
Downtown Vancouver Realtor
November 13, 2008 at 9:20 am
Great post. I have been trawling the bubble blogs here in Vancouver and I have to my surprise picked up leads! Most of the people on these bubble blogs are super negative bears and alot of realtors here are afraid to comment on these blogs. My comments mostly refute the overwhelming negativity, but I also expose most of commentators to the reality of whats happening in Vancouver Real Estate and my comments are generally well received. The leads I got were from people who liked my upbeat tone and wanted my take on real estate related questions they had. I was truly surprised. Never fear the bubble bears!
Bob
November 13, 2008 at 10:47 am
Lani- brilliant post and waaaay overdue.
there are some excellent bubble blogs out there and they were born to fill the vacuum created by the RE industry that didn’t want to address, or perhaps, recognize, the clanging alarms & facts about the industry that have led us to the point where we are today.
The info on many has been stellar.
@ The Tim – love your blog
Matthew Rathbun
November 13, 2008 at 9:18 pm
I just stopped by because I liked the bubble blog graphic… 🙂
No, really – reading stuff, even stuff that I disagree with is a good learning opportunity. It does help me when I encounter someone with this mentality. I get to respond well, because I’ve heard all sides.
It’s a great opportunity to both learn and teach.
Vicki Moore
November 14, 2008 at 2:42 pm
Okay. Okay. I’ll try again. I used to read them fairly often but I couldn’t stand the stress they caused my stomach. There was so much negativity and name calling.
John McLeod
November 15, 2008 at 10:37 am
I found this thanks to my colleague BubbleMeter. Thanks for the post (and the comments). We’ve engaged with Realtors on a regular basis, not always, but mostly with mutual courtesy.
My blogging partner has put up valuable statistical trend charts for Phoenix, Las Vegas, and other SW US centres, and now looks in-depth at Austin TX. I’m following the sub-prime crisis as it works its way through the nation’s (and now the world’s) financial services industry.
We’re here to help, since June 2006 🙂
PB
November 15, 2008 at 2:35 pm
You are incorrect on your broken-clock analogy.
The ‘bubble bloggers’ TOLD YOU EXACTLY why the crash was coming. They explained in detail the financial bubble that was producing the real estate bubble.
It is a failure of intellectual honesty to not acknowledge that. If their reasons for the crash were wrong, then you could invoke your broken-clock analogy.
You will never admit this, I’m sure. But the truth is you were told there was a bubble and it was explained why, and now you are attempting to pretend that ‘no one really knew’, and the bubble bloggers were ‘lucky’.
No one call call the exact peak of any market. To suggest that bubble bloggers were ‘wrong’ because the bubble coasted on for an extra couple years is intellectually dishonest. Who knew that the financial industry would commit financial suicide (subprime) with the full help and aid of armies of real estate agents?
Try.
Again.
PB Again
November 16, 2008 at 11:44 am
I knew you’d delete my comment.
But you deleted it because it put the lie to your broken-clock analogy.
Hope you enjoy Great Depression Part 2, because it is coming.
Benn Rosales
November 16, 2008 at 3:18 pm
PB,
It’s funny that you hung up on the broken clock analogy as the only reason it was placed in the article to begin with was to defuse the common argument from professionals about bubble blogs.
You’ve completely dismissed the entire point of the article from top to bottom to make an assumption.
You said:
The ‘bubble bloggers’ TOLD YOU EXACTLY why the crash was coming. They explained in detail the financial bubble that was producing the real estate bubble.
She said:
’ve been reading bubble blogs for a while now, and there is even a bubble blog being born in my very own city which a year ago would have made me nervous. Today, I am writing to encourage you to pay attention to bubble blogs.
You Said:
It is a failure of intellectual honesty to not acknowledge that. If their reasons for the crash were wrong, then you could invoke your broken-clock analogy.
She Said:
In 2005, 2006 and even 2007, bubble bloggers screamed doom in their various markets and real estate professionals stood up and said “NO” to their markets being in trouble. Now that the markets are crumbling like cheap single ply toilet paper, the bubble heads are relishing. As with any history lesson though, we must remember that a clock is right at least twice a day- NAR talking points will be right sometime as will bubble analysis.
You Said:
No one call call the exact peak of any market. To suggest that bubble bloggers were ‘wrong’ because the bubble coasted on for an extra couple years is intellectually dishonest. Who knew that the financial industry would commit financial suicide (subprime) with the full help and aid of armies of real estate agents?
She Said:
So, if you haven’t, take another look at the Bubble Blogs and if you look at the core of their message, you might agree with them more than you ever thought you could.
Try.
Again.
Vicki Moore
November 16, 2008 at 3:21 pm
PB – We must be reading different posts. Of all the positive things in this post you pull out the one sentence where you perceive some negativity toward bubble bloggers.
Read it again.
“…with the full help and aid of armies of real estate agents?” Gimme a break. There’s no national conspiracy on our part – I don’t believe there’s one on anyone else’s either.
Benn Rosales
November 16, 2008 at 3:24 pm
You Said:
I knew you’d delete my comment.
But you deleted it because it put the lie to your broken-clock analogy.
Hope you enjoy Great Depression Part 2, because it is coming.
I said:
don’t make assumptions.
Vicki Moore
November 16, 2008 at 3:29 pm
“Hope you enjoy Great Depression Part 2, because it is coming.”
Why would you say something like that – so morbid and insensitive? People lost not only their livelihoods but their lives during the depression. Do you think you’ll be immune from tragedy? Oh, the depression must just be something real estate agents are affected by.
Chuck Ponzi
November 17, 2008 at 1:20 am
Listen,
I started my blog, Socal Bubble in April 2005, and I was one of the first in the US. There were only a handful outside of that, Patrick.net in NoCal, Professor Piggington in San Diego, and Ben Jones for the whole US. Personally, at the time, I debated whether there was really a “bubble” in the whole US. And, I had charts/data/anecdotes to prove it. There was no question that SoCal and NoCal was in a massive bubble, but other areas were within reason. That also changed in 2005/2006 as the bubble exhausted itself in several areas and expanded in others (Salt Lake City is a perfect example of rolling bubbles)
Yes, the broken clock argument was used even then, and it was as wrong then as it is now. Prediction is a tough job, and nothing I would expect out of a real estate agent; most I have met are competent, if not terribly misled by the local Realtor Associations and the NAR, both of which hire “professional economists” that seem to be nothing more than cheerleaders for their industry; rather than giving honest feedback on what to expect, they sugarcoat every piece of information; doing a serious disservice to their membership.
However, nearly all bubble bloggers predicted that 2005/2006 would be the peak years for their respective areas (and they were) and predicted that sustained volume precedes price movements. 2007/2008 were just reflective of the abysmal volumes of years prior; created by prices off the charts wrt incomes.
However, bubbles don’t quickly resolve themselves. Even super-liquid stock bubbles take 3 to 5 years to bottom out. Less liquid housing markets will take more on the order of 5 to 10 years to resolve themselves back into normal functioning markets. All of the economic friction built-up through bubble financing and the resulting insolvencies it created are not resolved in seconds like bad trades, but rather take months or years to resolve and then create much larger cascading problems through local economies than commodities or stock bubbles do.
One of the biggest failures of the real estate industry this last century has been to ignore the bubble bloggers of the last 3 years. It’s more than just charts and graphs; it’s a reflection of the local angst and struggles. The biggest mistake was to assume that they were simply disgruntled ne’er-do-wells. Most are, in fact, very accomplished investors.
Chuck Ponzi
Benn Rosales
November 17, 2008 at 8:52 am
Chuck, outstanding commentary. I often wonder if we just haven’t become cynical about the cynics – it’s human nature to hope and pray for the best and that the cynic is wrong- in reality, there’s often just reality.
Vicki Moore
November 17, 2008 at 12:20 pm
Chuck – “professional economists” that seem to be nothing more than cheerleaders for their industry”
One of the ways the leaders of our industry have missed the target. I’m still learning how to create my own stats as my local MLS isn’t very useful. Some of us have had to go to outside services.
“One of the biggest failures of the real estate industry this last century has been to ignore the bubble bloggers of the last 3 years.” I certainly did that. Mostly because the blogs I read were so caustic. It’s unfortunate – I could have learned so much. But I’m starting now, so…
Lingus
November 17, 2008 at 8:47 pm
Realtors as a trade group lost every last bit of credibility, thus integrity when the local RE agents deviated from providing a roster or suitable shelters for viewing to acting as investment advisors and not warning buyers about the fraudulent financing schemes. Realtors knew EXACTLY what was going on but just couldn’t say no and violated the very code of ethics they’re sworn to uphold. I’ve yet to meet a real estate agent who has minimum competency in economic fundamentals and knowledge of finance or architecture. Most of them merely yammer on about some meaningless “feature” of a shack(yes, houses are nothing more than shacks), and conduct themselves in a way that puts buyers at severe risk. Their expertise in anything but sales is non-existent. Ethics? Laughable.
Marcy
November 24, 2008 at 3:17 pm
Just a quick comment and observation coming from the consumer side…remember, it is human nature to try and find someone to blame – particularly a group of someones.
That those persons (Realtors in this case) honestly had little to do with creating the bubble, is ignored in favor of being able to point a quivering, righteous finger. We always want someone to blame when we get a nasty surprise, or things go bad.
Sentiment is exactly that…sentiment. Try not to take too personally, the irrational rantings of people who are using the perceived anonymity of the internet to vent their anger. If rationality were common, a very great many negative things in history would never have occurred.
It’s silly and misguided to blame Realtors. Why not blame the government? Blame yourself, if you accepted and signed mortgage papers for an ARM or other loan you had no prayer of affording, on a home that was about 400k more than you could afford. Blame brokers, too. Blame the investment houses. Heck, blame all people under age 60, then for good measure, blame all people over 60 in particular, for nagging so much about saving money and having to walk to school in the snow uphill both ways so often, they made their offspring irritated enough to jump on the credit bandwagon and go into untenable debt. I am of course, being snarky.
Truth be told, greed is more ingrained in human nature than common sense. If option ARMs had been made available to our parents in the same way, there would have been NO difference. Same result. The “Good Old Days” never existed, except as a blurry refraction across someone’s rose-colored glasses. I’m old enough to remember previous recessions, including the early 70s. While this one is likely to be nastier and deeper than any other barring the Great Depression imho, this too shall pass.
My own agents (a husband and wife team) are friends of ours, and have been for years. That’s why I selected them. I KNOW they will not blow smoke up my bum, and if they try, I check ’em. How silly would it be of me to try and accuse them of having a hand in this crisis? It is fine to be upset for a while, but being upset is pointless if all one does is light straw men on fire.
My advice to those with their tails in a wringer over the bubble, is to clean your own house first, then regroup and decide how best to handle this strange new world. Don’t waste time and effort shrieking futile imprecations at strangers who just happened to be Realtors. Just makes you seem like a nutty person in a park, screaming at the trees for casting shadows.