The Insider: Issue 030
January is a month full of paradoxes: cold yet promising, dark yet hopeful. It’s first, fresh and ambitious and yet the pinnacle of a season made for hibernation and rest. We start off the month by investigating a few things off the beaten path — small spaces, unexpected career twists and turns — and all the latest industry news. Carry on.
Last Week This Week
Bloomberg released a study of over 100,000 property records and found that ibuyers are selling homes to institutional investors at a much higher rate than expected. For example, in metro Atlanta, a major ibuyer market, 40% of all homes bought by ibuyers are being flipped to institutionals. In minority majority neighborhoods, that number gets as high as 70%. Last year, we put forth the possibility that ibuyers, whose public stories are soaked in consumer empowerment and pro-homeownership vibes, would evolve into nothing more than the acquisition arms of mega-landlords, vacuuming homes into giant rental portfolios.
Some have waved away concerns about this as insignificant relative to the size of the market, or claimed that normative judgements about who ought to own and rent are moralizing soft-mindedness.
We disagree.
Homesmart, the low-cost (to agents), transaction fee brokerage/franchisor looks like it’s getting ready to go public. They are trying hard, like pretty much every brokerage on this track, to position themselves as a tech play in order to boost their valuation. We wonder how/why investors still buy this angle, because, well, it’s always a big, big stretch.
Unsealed court documents revealed that Realogy lobbied NAR to rescind its rule mandating an offer of compensation on any listing entered into the MLS. While this left many scratching their heads (because Realogy has thousands of buyer agents), it strikes us as part of the maneuvering we noted in our Q3 2021 Industry Landscape webinar, in which big players will be making moves to anticipate DOJ action that may blow up the system of cooperation and compensation underpinning residential real estate brokerage. Realogy has lots of buyers agents, yes, but they are very listing agent heavy in key markets. A world where brokers sell their own inventory is therefore less onerous to Realogy than it is to pretty much anyone else. We read this as Realogy saying, in effect, “bring it”.
Transunion and Experian announced that they would both begin including “buy now, pay later” (BNPL) loans in credit reports. Equifax made a similar announcement last month. BNPL is exploding right now. The UK’s largest BNPL player just launched a browser extension that lets people do this on pretty much any online store, even if they don’t themselves offer this option. This could get messy for real estate practitioners, who may see deals hung up over their clients’ decision to pay off a $800 Yeti cooler over 5 years 😬
Have You Heard About This?
Skinny Icon
Could you stretch out in the “world’s skinniest house?” The Keret House (pictured above) is a structure and art installation in Warsaw, Poland, designed by architect Jakub Szczęsny. This narrow house measures at 3.02 feet wide at its narrowest point, and 4.99 feet at its widest. It features two stories, one bedroom, a kitchen, bath and living area. The house is considered a work of art because it does not meet building codes for homes, even though it is used as a residence for traveling writers. It is considered one of the most iconic houses/structures in the world. We obviously love the creativity, ingenuity, and idea of working with existing spaces in new and functional ways.
Small Is The New Black
Since we’re already on the topic of skinny houses, how about tiny homes? Some of us here are a bit obsessed with the idea of chucking all the extraneous “stuff” from our lives and packing into a tiny home somewhere off the grid yet within driving distance of a Whole Foods. (Pssst: if you know of this place, do tell.) Some of our favorite places to gawk at tiny homes online are here, here and this tour inside one of Tokyo’s tiniest luxury apartments.
What's Inside
Don’t miss our Q1 Industry Landscape webinar this Wednesday at 11:00 a.m. Pacific, 2:00 p.m. Eastern. Brian will give you our take on what to watch as the year lifts off.
Seems like everyone from Opendoor, to EXP, to local indie brokers is chasing the unified/integrated/harmoniously profitable real estate transaction. Or, as we used to call it, “one stop shopping”.
We wondered: Why are we assuming that consumers want this?
We’re dropping an Original Research report that gets at this question later this week.
Inspiration Point
Sweet Seconds
One of the most interesting things about real estate is that the business is more often than not a second career for agents. We meet agents every day who’ve come from either the corporate world or some other profession or business venture and landed here in what we’d call their “second act.” That’s part of what is so interesting about the short film series of the same name that Mailchimp has been producing for a few years now. You won’t find profiles of real estate agents - but you will find inspiring stories of people who started over in entirely new fields at what may have seemed like a time they’d be winding down in life. These stories are so impossibly hopeful and full of creativity. Enjoy!
Quote of the week
“I don’t understand how a thermos keeps things both hot and cold.”
— Rose Nylund, Golden Girl (RIP Betty White)
