{"id":1876,"date":"2015-02-18T16:43:06","date_gmt":"2015-02-18T20:43:06","guid":{"rendered":"http:\/\/dankrell.com\/blog\/?p=1876"},"modified":"2019-10-05T09:07:48","modified_gmt":"2019-10-05T13:07:48","slug":"real-estates-new-rules-common-sense","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2015\/02\/18\/real-estates-new-rules-common-sense\/","title":{"rendered":"New rules in Real Estate"},"content":{"rendered":"\n
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Real estate canon used to be straight forward and for the most part consistent. For instance, if you planned a sale, you would target spring time because that was generally accepted as the time when home buyer activity was the greatest; or buying a home was a rite of passage. But since 2008, what was generally accepted has been persistently challenged; home buyers and sellers have shifted into a new paradigm with new rules.<\/p>\n\n\n\n

It is no coincidence that Zillow Talk: The New Rules of Real Estate<\/em><\/a> (by Zillow CEO Spencer Rascoff and Chief Economist Stan Humphries, Ph.D.) comes at a time when significant changes in consumer beliefs and expectations about real estate have become widely recognized. The book is described by Zillow as \u201c\u2026poised to be the real estate almanac for the next generation<\/em>.\u201d And looking at the table of contents<\/a>, you might think that the highly acclaimed tome is just another book about the buying and selling process; yet it seems to discuss practical aspects about buying and selling a home, as well as possibly confronting real estate myths.<\/p>\n\n\n\n

It will remain to be seen how influential the work will become, as research has indicated that home buyers are typically well informed and out in front of housing trends.<\/p>\n\n\n\n

A 2012 study by Karl Case, Robert Shiller, & Anne Thompson (What have they been thinking? homebuyer behavior in hot and cold markets.<\/em><\/a> Brookings Papers on Economic Activity, 265-315) revealed perceptions and expectations of homebuyers from four metropolitan markets over a 25 year period. The authors concluded that the surveyed home buyers were well informed and very much aware of home price trends prior to their purchase. Data suggested that home buyer opinions (beliefs) fluctuated over time; there was more agreement among respondents during strong markets, and increased doubt during times of market uncertainty. There was also a strong correlation between price perceptions and actual movement in prices. Although home buyers were \u201cout in front\u201d of short term market movements, their short term expectations \u201cunderreacted\u201d to actual home price changes; while long term expectations were persistently \u201cmore optimistic.\u201d<\/p>\n\n\n\n

Suggesting a set of \u201cguidelines\u201d for real estate is a trap that implies that the housing market is straightforward and static; where personal and regional differences don\u2019t matter and the market doesn\u2019t change. However, David Wyman, Elaine Worzala, and Maury Seldin raise the question about becoming complacent with trends and models. In a 2013 exploratory paper (Hidden complexity in housing markets: a case for alternative models and techniques,<\/em> International Journal of Housing Markets and Analysis,<\/a> 6:4, 383 \u2013 404) they discuss how rigid market models may lead to rules where buyers and sellers could make poor decisions.<\/p>\n\n\n\n

The authors\u2019 discussion of \u201ccomplexity theory\u201d in real estate in not unlike the application of \u201cchaos theory<\/a>,\u201d which focuses on letting go of assumptions upon which rules are definitive; and view housing as a dynamic and changing environment. Citing incidents leading up to the financial crisis, the authors make a case for understanding the market as complex and using common sense before making (buying and selling) decisions.<\/p>\n\n\n\n

So as we begin to understand the new real estate dogma, it is likely that the new rules will most likely change along with the market. And much like the housing market, consumer beliefs are also dynamic<\/a> \u2013 which seem to be ahead of the industry experts.<\/p>\n\n\n\n

Dan Krell
\u00a9 2015<\/p>\n\n\n\n

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Disclaimer<\/a>. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.<\/p>\n","protected":false},"excerpt":{"rendered":"

Real estate canon used to be straight forward and for the most part consistent. For instance, if you planned a sale, you would target spring time because that was generally accepted as the time when home buyer activity was the greatest; or buying a home was a rite of passage. But since 2008, what was … <\/p>\n

Continue reading “New rules in Real Estate”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[270,160,419,406,288,13,26,27],"tags":[490,879,926,466,445,797,593,776],"class_list":["post-1876","post","type-post","status-publish","format-standard","hentry","category-home-buyer","category-home-buyer-behavior","category-home-owner","category-homeowner","category-housing-market","category-real-estate","category-real-estate-market","category-real-estate-market-trends","tag-home-buyer-2","tag-home-buyer-behavior","tag-home-owner","tag-housing-market-2","tag-housing-market-trends","tag-real-estate","tag-real-estate-market-2","tag-rules-of-real-estate"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p1VZLf-ug","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/1876","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/comments?post=1876"}],"version-history":[{"count":5,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/1876\/revisions"}],"predecessor-version":[{"id":5577,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/1876\/revisions\/5577"}],"wp:attachment":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/media?parent=1876"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/categories?post=1876"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/tags?post=1876"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}