Matrix Blog

Posts Tagged ‘David Duncan’

Inman Connect Conference As A Social Object

August 6, 2007 | 12:36 am | |

Blue Monster from

After three days of real estate bliss at Inman Connect in San Francisco last week, I flew home early Friday afternoon.

Other than the:

  • 2-hour delay at SFO,
  • the lightning storm at JFK International that shut down all air traffic in the Northeast (so I heard),
  • taking a “bigger arc” over Chicago,
  • flying down to Virginia and staying in a holding pattern for another hour,
  • running so low on fuel the airplane had to make an unscheduled landing in Atlantic City,
  • waiting on the tarmac for another hour until about 2am,
  • and then finally arriving at JFK,
  • getting home at 3:30am, it was uneventful,

with one glaring exception: While trapped in the plane in Atlantic City, I got to spend about an hour speaking with Noah Rosenblatt, of, one of the smartest bloggers out there. It was 1am, and I am sure people around us thought we were insane, having excited discussions about the housing market, the economy, the fed to name a few. He’s an ex-Wall Street trader, current successful real estate broker who shared his insights with me about the turmoil in the financial markets.

We both saw the irony of the financial markets right now. Their volatility is driving a flight to quality so bond prices are rising, making yields fall…yet mortgage rates aren’t falling because of the credit crunch and diminishing liquidity.

I have felt strongly for the past year that the Fed would be forced to lower rates by the end of the year, but now its a real dilemna for them. Housing/mortgages have the potential to drag the economy down, spurring the fed to drop rates, yet, with rising oil prices, among other things, there are inflation concerns, causing the Fed to try to cool down the economy. The Fed’s position is probably going to have to remain neutral for a while, so perhaps the language in the upcoming FOMC meeting will be tweaked to show more neutrality.

but I digress…

Marketing is all about social objects.

Hugh MacLeod of Gaping Void gave the keynote speech and he was incredibly refreshing. Of course his use of language was much broader than the audience was prepared for if you know what I mean, but he was so interesting, and I feel more…literate, and stuff… His blogging success story with Stormhoek wine was truly amazing.

Bloggers connect, the concurrent conference was a big success and I learned a lot.

I spoke to a bunch of really enthusiastic bloggers brimming with ideas and excitement over their craft including, but not all inclusive because its late: Joe and Rudy of Sellsius who survived their cross country rv tour, Dan Green, John Keith, Joel Burslem, Jessica, Brad (of course) and Glenn of Inman, Lockhart Steele, Pat Kitano, Kevin Boer, Heather Fernandez, Dustin Luther, Ardell DellaLoggia, Teresa Boardman, Hugh MacLeod, Jim Duncan, and Matt Heinz to name a few.

Tags: , ,

Housing Market Only Fixed By ARMs

October 25, 2006 | 7:52 am | |

Mortgages have been the center of attention (ok, one of the centers of attention) as they relate to the housing market. The Mortgage Bankers Association (MBA), the major mortgage trade group [announced this week]( that the first half of 2006 saw a drop in mortgage volume, with the exception of non-traditional products like interest only and option-arm products. Here’s a recap:

  • 10% drop in purchase mortgages
  • 22% drop in refinance mortgages
  • 49% were first mortgages
  • 33% were first time home buyers
  • 32% rise in number of reverse mortgages
  • 1% increase in second mortgage volume
  • 19% ARM market share, down from 30% share

[MBA projects a 19% overall drop in originations this year and a 14% drop in 2007 before leveling off [CNN/Money]]( They describe the housing market as “normalizing” and expect to see near normal economic activity by 2007 and 2008.

“Long-term interest rates have remained low in the face of rising short-term rates, equity prices have risen nearly 20 percent, capital expenditures remain strong, the trade sector has turned from a big drag on growth to a modest stimulus and energy prices have dropped sharply,” Duncan said of his forecast for longer-term stability. [MBA chief economist Doug Duncan]

The Fed likely will keep interest rates unchanged with the federal funds rate at 5.25 percent rate through 2008, the trade group predicts.

One of the reasons that the number of sales eased this year was the increase in mortgage rates – both real and perceived affordability. Its no surprise then that non-traditional mortgage applications have increased as purchasers seek to keep their payments in line with their incomes.

ARM mortgages helped fuel the housing boom and this year, their share dropped from 30% to 19%. Why? The spread between ARMs and fixed mortgages has contracted (do we hear inverted yield curve?) A stable fixed mortgage market is unlikely to increase the number of sales. In fact, affordability will suffer further as $1.1 to $1.5 trillion ARMs will reset in 2007. More than half of those are expected to move to a fixed rate product while the remainder do nothing.

[MBA forecasts fixed mortgage rates to remain at or slightly above current levels [MW]](

Fixed-rate mortgages should remain at about 6.3% to 6.4% through the rest of the year, according to the most recent Mortgage Bankers Association forecast. Rates are expected to rise to about 6.7% by the end of 2007 and to about 6.8% by the end of 2008.

One of the byproducts of the drop in origination volume will be the shakeout in lending over the next year. [Too many lenders and mortgage brokers to divide up the pie. [LA Times]](,1,7145934.story?coll=la-headlines-business&track=crosspromo) Lender profits are down as margins gets squeezed.

Countrywide Chairman and Chief Executive Angelo R. Mozilo and his top executives outlined current troubles that largely boiled down to too many competitors chasing too few loans.

Source: NYT

Mortgage applications tend to stagnate when mortgage rates are flat and it follows that housing would stagnate or weaken further until the inventory overhang is absorbed. However, the housing market is not just about fixed mortgage applications and their rates which is what the public tends to relate to. Its more about ARMs. The spread between ARM and fixed rate mortgages is much smaller today than a few years ago and that has been the impetus in the smaller number of mortgage and housing transactions.

Its cheaper to be more risky but less so today than before.


Carnival Of Real Estate Enters The Matrix

September 25, 2006 | 12:01 am | |

As I watched my turn get closer and closer to hosting the [Carnival of Real Estate](, I thought it was amazing how much great content is being pushed into the public domain every week through the carnival. In fact, carnival participants simply ooze creativity and new ideas. Simply look at [last week’s carnival post at Blog]( to get an idea of what I mean.

I started getting post submissions early last week and by Sunday I had a lot of reading to do. Although the carnival hosts are expected to post only their favorites, I thought to myself, how can I do that? So I decided to provide a top ten list and then everyone else. I excluded a few get rich quick posts and those who seemed to be more interested in selling something or extra posts from those who submitted more than one.

I am finding that some of the most active and insightful posts this week have been provided by real estate brokers. Its interesting to me because its been my impression that real estate brokers were somewhat late to blogosphere party as a profession but now they really get it and are rising in numbers quickly.

So its no wonder there was a lot of discussion about Redfin this week. I think that a weaker housing market sort of forces the real estate brokerage community to rethink the status quo. Thats really refreshing and I found myself adding links to my blogroll.

The Matrix Top 10 List

  1. [Everybody’s Going Local [Future of Real Estate Marketing]]( Joel Burslem provides a very insightful look at the trend toward local web sites to deliver real estate related information.
  2. [What Housing Bubble? [The Property Monger]]( looks closely at population trends.
  3. [16 Words or Less [Agent CEO]]( reminded me of the axiom less is more. I tend to fail miserably being concise but if someone leaves me a voicemail longer than 16 seconds, I tend to delete it.
  4. [Crackdown on Relisting Homes [Altos Research]]( Altos crunches the numbers. Relisting is simply wrong.
  5. [Kicking the Tires on Housing Futures as a Predictive Tool [True Gotham]]( Doug Heddings deals with one of my favorite topics, housing futures.
  6. [Google and Zillow [Real Central VA]]( Jim Duncan tells us that broker _marketing will become less and less a component of a Realtor’s core competency. Representation will._
  7. [Cease and Desist [Real Estate 2.X]]( gives us a good chuckle and a whole new way to name our blogs.
  8. [Dual Agency: Using the Seller’s Agent as Your Buyer’s Agent [Searchlight Crusade]]( addresses awkwardness and multiple loyalties which are commonplace.
  9. [Would the Founding Fathers Have Founded an MLS? [Charlottesville Area Real Estate Blog]]( concludes that restrictions on listings are better than an open system.
  10. [For real estate promotion, the business card form factor is a tiny little workhorse [Bloodhound]]( Glenn says its all in the cards.

Here are the rest of the posts submitted in no particular order but are all a good read:

Market discussion (surprisingly quiet this week)

  • [Trulia Hardball: Predictions for the August Existing Home Sales Data [Trulia Blog]]( Including my picture in a post is simply a guaranteed inclusion in the carnival. Trulia makes several people go out on a limb on Monday when NAR releases its existing home sale stats, myself included.
  • [Market Microbursts []]( who correlates the housing market to a pilot dealing with windshear.

Raising the bar on the real estate brokerage profession:

  • [Real Estate reform [Phoenix Arizona Real Estate Blog]]( Jonathan Dalton laments that _because if the public is willing to continue supporting real estate agents who either don’t have the knowledge, the time or the desire to truly learn how to do this business right and protect their clients’ best interest, then the debate is just so much hand-wringing among the rest of us who can’t understand why these other agents were selected in the first place._
  • [It is Past Time to Raise the Bar! [The Phoenix Real Estate Guy]]( He feels that one of the biggest challenge in the industry to having experienced agents mentor those new to the profession.
  • [Room for Improvement [Homethinking]]( There are many ways to rank Realtors. How about by what homeowners have to say about them?
  • [How real estate is like football [John Novak]]( makes the argument that customers don’t understand alll the preparation that goes into a real estate transaction. The pros make it look easy but its not. (note: I wish MSU had prepared more for Notre Dame last Saturday)
  • [MLS discussion [MOCO Real Estate News]]( starts up a discussion about what should be considered when starting up an MLS from scratch.
  • [Welcome to Real Estate, Meet your Frienemy [Laguna Niguel Real Estate]]( wonders whether brokers talk about themselves too much and fail to talk up their property. An excellent point.

Broker ethics and “get rich quick” schemes

  • [Sunday…Is A Good God Day…For Hell…Hello…Roar! [“The Lovely Wifes” Blog….Kum La Ka Lakka]]( who tells us 3 ways to say Hell-O! In other words, no bad deed goes unpunished. (The wife speaks…)
  • [The sharks have had their fill [Broker Bryant’s Real Estate Ramblings]]( He paints the picture using the characters Mr. Ive B. Screwed, WeRipOff, GetRichToday, LLC to illustrate how some unscrupulous characters took advantage of naive investors who had no business investing. (The husband speaks…)
  • [BREAKING NEWS: Pinnacle Development Partners LLC Under Investigation [Bigger Pockets]]( for what was described as a ponzi scheme to investors. No shortage of this sort of thing.

Mortgages and Refi Strategies

  • [What do Mortgage Underwriters do? [Pacesetter]]( David Porter answers the questions all of us have been wondering during the housing boom.
  • [Different Ways For A Busted Refinancing Plan [My 1st Million At 33]]( Frugal brings bad news to over-leveraged real estate investors hoping to refi their way out of trouble.
  • [Avoiding an Expensive Mortgage Mistake [My Wealth Builder]]( Super saver tells us that if we can’t afford a house with a fixed rate mortgage, then we better buy a smaller one.

New brokerage business models

  • [Real Estate 2.0 â„¢ [360 Digest]]( This poster says that Redfin using copyrighted material without permission all the time and they do not have a registered trademark on the term “Real Estate 2.0” according to our friends at [Sellsius](
  • [Let The Market Decide [Geri’s Blog]]( tells us We lose so much when we operate from a position of fear. New brokerage services like Redfin will succeed or fail based on how the consumers accepts it, not on what the brokerage community thinks.
  • [Book Report: “An Army of Davids” [Web 2.0 For Real Estate Pros]]( gives us a workable definition from decidedly fuzzy real estate terms that refer to the future of real estate.

Buyer and seller advice

  • [Dear Mr & Mrs Seller, Here is what you need to do [miOaklandCounty]]( provides a laundry list of old school and new school advice for home sellers.
  • [It’s Best To Buy And Sell In The Same Market [Mitchell’s Manhattan Blog Estate]]( who tells us that if you buy and sell in the same market, it all comes out in the wash.
  • [Our New Home That Looks Old []]( Apparently, you _get what you get._

Defies categorization

  • [50. Blog Marathon: 50 Blog Posts in One Day [Sellsius]]( I am starting to wonder if these guys ever sleep?
  • [Sustainability is Good Business: Obstacles to Green Building Progress [Jetson Green]]( lays out the argument that going green is good business because green buildings are more efficient.
  • [Florida Losing Appeal [Homeowners Insurance Lowdown]]( Hurricanes are driving up or eliminating accessibility to homeowners insurance which will hurt Florida as a retirement destimation.
  • [Creating Intentional Communities in Retirement [Queercents]]( addresses the retirement issue with a housing model that emphasizes community life.
  • [The Shire in Bend, OR [Zillow]]( goes Lord of The Rings on us.

Thanks to all of those who submitted posts. Great stuff. Don’t forget to check out [YoChicago](, next week’s host for the Carnival of Real Estate.

Its now 10:30pm EST on Sunday. I’ve got to get some sleep – going to be on [CNBC’s Morning Call]( live at about 10:15am on Monday for 5 minutes with another guest. Should be fun.

Tags: , , , , , , ,

[Matrix Zeppelin Series] Coastal, Gentrifying, Negative Light, Overload, Raw Numbers, Get Ugly, Lereah Is MIA, Bonuses, Slowdown Coming, Going Into Foreclosure

September 15, 2006 | 6:46 am | |

This week, there was no hot air in the Zeppelin commentary. In fact it was so heavy, I don’t think it got off the ground. Here’s a sample:

  • It’s interesting reading everyone talk about the inpact of interest rates on the slowing real estate market. “Rates when up .24356, that’s why real estate is slowing” etc. That is nothing! I live in Florida. I paid $3500 for my home owners policy last year. I thought that was too high. I just got my renewal notice. My new premium is $12,500! That’s an increase of $700 per month! Florida and the coastal areas of the US are in a free fall in property values as it is. This new wave of insurance hikes will be a disaster for coastal property values!

  • Are you allowed to say “in a gentrifying area”?

  • I have come to belive all news is presented in the most negative light possible, especially news about the economy. I have also come to believe that most people who post comments to blogs or news stories want the sky to be falling (I don’t know why – but it appears to be the case). I expect that you will be bashed for trying to “keep it in perspective”. [as I suspected, Matrix readers didn’t do that – Jonathan]

  • We can strip away all the information overload and focus in to what real estate pricing is all about which is simply supply and demand.

  • You definitely pinpointed the limited usefulness of the RealtyTrac report in that the comparison should be to the national housing stock that has mortgages. That’s exactly what the Mortgage Bankers Association did in a survey out today, which puts the foreclosure rate for the second quarter at .99 percent — up 1 basis point from last quarter, but down 1 basis point from the same quarter last year. If you have a lot more people taking out loans, as they did in the boom years, the (raw) number of foreclosures is naturally going to go up, even if people are just continuing to default at the same old rate. The real question is what’s the number of homes in foreclosure as a percentage of all loans. The MBA survey did show a pretty good bump in the number of delinquencies on subprime and FHA loans, however (and even prime ARMs), but chief economist Doug Duncan said he doesn’t expect “order of magnitude” increase in delinquencies next year. Companies like RealtyTrac are in the business of selling info about foreclosed properties to investors, and maybe the raw numbers mean something to that crowd — like more opportunities to cash in on others’ misfortunes. Which doesn’t mean their numbers aren’t true. They just, as you say, lack perspective.

  • Here in Southern California, foreclosures (Notice of Defaults, actually) are sky-rocketing. In the first year of this housing market down cycle, the monthly number of NODs is already nearing the worst monthly levels of the 1990’s housing market down cycle. Yes, this is perspective. This is going to get very ugly before the sun starts to rise again.

  • Now that you mention it, Lereah has been MIA for the NAR — hadn’t noticed that. Stevens tenure is about to end, so we soon won’t have him to kick around any more. But let’s give it one more shot. The Washington Post carried a piece last Saturday about (essentially) NAR President Stevens getting caught in the market … um … correction. “his old house in Great Falls has now been on the market for a year at the price of $1.45 million.”What I should have done,” confessed the senior vice president of NRT Inc., parent of Coldwell Banker Residential Brokerage, “was listened to my agent and cut the price by $50,000 to $100,000 early on, and the property would have sold last October.” Or, even better, he said, “I should have listed it a month earlier,” when the market was only just beginning to lose air.” [And on, and on he goes.]( I don’t know what average days on the market is in the DC area, but I bet it is less than 365. And Stevens hasn’t sold yet…

  • I was under the impression that prior to the impending bonuses of 2006, 2005 was also a record year. However, it didn’t seem to do all that much for housing – maybe in the luxury/ultra luxury area, but not overall. We still had a lousy spring. So I can’t see why that would change this year, with inventory so much higher. Besides, don’t all those rich guys own by now?

  • New York’s economy is strong, and people are pouring in. In the short run, therefore, any price decrease would be the result of prices being too high relative to income to being with, and nothing else. I think that may happen. Next year, however, it may also be that weakness in the housing market elsewhere causes weakness in the economy elsewhere and weakness in the stock market, working its way back to NYC. Bonuses will be at record levels this year, but Crains reported on Monday Wall Street’s three-year bull-run is losing steam. “After a terrific first half, earnings are expected to fall 40% in the second half…The slowdown is hitting virtually every trade plied on Wall Street. Stock and bond underwriting volume plunged nearly 50% in the summer quarter compared with a year earlier. The hugely lucrative businesses of advising on corporate mergers and taking companies public are also slumping.” Perhaps, with a slowdown coming, those high flying finanical geniuses won’t blow their bonuses this time around. Naaaah.

  • But you DON’T have perspective until you can answer the question, “What is the impact of NODs (or foreclosures) on the market?” Are they affecting inventory? By how much? What other pressures are there on inventory? The RealtyTrac survey reports 12,506 California homes entered into foreclosure in August — up 25 percent from July and 160 percent from the year before. That sounds pretty serious, right? Well, maybe not if foreclosures were at historic lows. Maybe not if some 500,000 homes change hands in the state every year. Which is not to say that the market’s not soft, especially in particular areas. Inventory in the state is up — CAR puts it at 7.5 months in July, versus 2.9 months same time last year. But what is causing inventory to rise? Is it because more homes are going into foreclosure, or because houses are just sitting on the market because they are overpriced? The bottom line is that the raw number of foreclosures, by itself, doesn’t tell you that much about supply and demand.

Tags: , , ,

Getting Fixed: Reissuing 30-Year Bonds May Extend Mortgage Products To 40 Or 50 Years

February 20, 2006 | 12:01 am |

The growth of ARM mortgages over the past 5 years is said to have been the main catalyst of the housing boom. As ARM’s fall out of favor, the fixed mortgage has come to the rescue. With the US Treasury re-issuing 30-year bonds again, lenders have [a better idea how to price 40 to 50 year mortgages [Washington Post]](

The longer-term mortgages would lower monthly payments.

To the extent more consumers have more products available, it will be a help for affordability,” said Douglas Duncan, chief economist at the Mortgage Bankers Association.

Don’t expect borrowers to stick with these loans for the full term. He said these homeowners are likely to eventually refinance into 15-year or even 30-year loans to repay them faster.

Its the same concept as ARM mortgages:

Its all about lowering the mortgage payment.


Ain’t It Cooling?: The Number Of Sales Eases From Historic Highs

November 15, 2005 | 10:26 am | |

According to a survey by Real Trends by 48 of the major US real estate firms, [the number of contracts signed this month compared to the same month last year dropped 8% but remained at historical highs [WSJ].]( Of course this is not necessarily representative since nearly half of the 90 major brokerage firms did not reply to the email survey. Still the story was on page 1 of the Wall Street Journal.

“‘The air is coming out of the balloons,’ says David Lereah, chief economist at the National Association of Realtors, the nation’s leading real-estate trade group.”

“‘We believe the market has peaked,’ says Doug Duncan, chief economist of the Mortgage Bankers Association. Because of brisk sales earlier this year, he expects sales of new and previously occupied homes to reach a record 8.3 million in 2005, up 4% from 2004. But he believes sales will decline 3.5% next year, ending a four-year streak of record-setting totals.

A cooling of the market is likely to be welcomed by the Federal Reserve, which has worried that home prices have become frothy and banks’ mortgage underwriting standards have slipped. For the past few years, fast-rising home prices have allowed people to borrow more against their home equity, fueling a spending boom. Last month, Fed governor Donald Kohn, citing ‘some indications that housing markets are cooling off,’ said this would force consumers, who are not saving any of their current income, to save more to build wealth, restoring balance to the U.S. economy.”

The gist of this WSJ article is the fact that the market is cooling but remains at record levels. In other words, the number of transactions will ease from historic record levels. However, articles on the housing markets like this seem to blend the number of sales with price levels to the average reader. The takeaway here is that the “frenzy” is generally over, the number of sales will ease and that housing prices are not expected to rise as rapidly as years past.

Tags: , , ,

Will Oil Grease The Inflation Wheel?

August 16, 2005 | 9:31 pm |

The Mortgage Bankers Association’s chief economist, Douglas Duncan said that the trigger for price declines is always the loss of jobs and doesn’t see a slowdown in employment, “not until 2006.” He predicts that 2005 will set records “and only an unexpected roadblock of monumental size will slow its pace”

Well, we may have a potential roadblock, sort of. Oil Prices have often been a trigger for inflation and higher long term rates such as mortgages.

Then why isn’t it happening now?

Well, here’s a thought…after adjusting for inflation, we are still well below [inflation-adjusted oil prices]( that peaked at $94 per share in 1980. Core inflation is still within the Fed’s confort zone but [energy prices are rising](


Get Weekly Insights and Research

Housing Notes by Jonathan Miller

Receive Jonathan Miller's 'Housing Notes' and get regular market insights, the market report series for Douglas Elliman Real Estate as well as interviews, columns, blog posts and other content.

Follow Jonathan on Twitter

#Housing analyst, #realestate, #appraiser, podcaster/blogger, non-economist, Miller Samuel CEO, family man, maker of snow and lobster fisherman (order varies)
NYC CT Hamptons DC Miami LA Aspen
Joined October 2007