CAAR Blog

I’m thirsty, but not drinking the Kool-aid just yet

The NAR project formally known as the Gateway, a mash-up of all real estate data in the country, has now been relabeled The Real Estate Channel (TREC). There has been a new “interim� report issued by the Presidential Advisory Group (PAG), but still there is very little detailed information about NAR’s plan.

The new report makes it clear that the intent of TREC is NOT to be a national MLS or have a public access point (other than REALTORS®). These two clarifications will ease the fears of many local MLS systems and REALTORS® who were worried about the Gateway project. For others, the idea of a national MLS is appealing and they are still thinking that eventually TREC will become a national MLS, but they are keeping quiet about the prospect for now.

Not making the data publicly accessible is a similar situation. If you are against public access to data (read: still haven’t made the shift to reality), you will feel good about the new clarification. If you don’t worry about your clients having access to data, you will be happy with the report because you know that eventually such a massive mash-up will become available to the public.

So, what the current report says is that NAR will set aside the controversial aspects of the project for now. This seems like a good compromise to keep things moving forward although is does not feel particularly honest. So I find myself struggling between integrity and progress – between trust and fear – between belief and skepticism. Someone referred to the issue in terms of the Wizard of Oz – is there really anything behind the curtain?

The difficulty with this issue is that NAR does not have the details/answers to the questions because this is still a work in progress. This lack of answers causes fear because it is human nature to fill in information voids with negative beliefs. There is so much still unknown about TREC, that there is a lot of negative stuff being made up or inserted into the general thinking on this. NAR is in a tough situation because they need to get the information out to build trust within the membership, but they do not have the answers that will allow members to buy-in to the concept.

I’d really like to be a believer on TREC, but I’m going to have to wait for more information. I’m a glass half full type of guy, so I’m approaching this as a skeptical optimist. I’m thirsty for a good data mash-up for real estate, but I’m not ready to drink the TREC flavored Kool-aid.

I think there is some potential for TREC – not stuff currently being discussed, but other outcomes that are not in the report. I have no insider information and have never been subjected to a non-disclosure agreement on Gateway/TREC, so these ideas should be seen as food for thought.

Suggested Outcomes for TREC

• Once the mash-up of all property data is complete, TREC should sell the data to the Zillows and Trulias (and REALTOR.coms) of the world and then we would have consistent data everywhere. This assumes that the TREC data is better than what these sites currently have and that remains to be seen.
• Sell the data to local MLSs for cheaper than what they are currently paying. Most MLS systems have fairly complete public records data and much of what the TREC system will be collecting. So the question is can TREC provide this data cheaper and more efficiently than the current process.
• Allow REALTORS® and REALTOR® Associations to provide public access to the TREC data through their web sites. This will add value to the member’s web sites which seems like a good trade-off for the millions of dollars of REALTOR® money being spent to develop this system. This will allow the data to be available to the public while pushing consumers to the REALTOR®. In addition, this may be a way to avoid the conflict with REALTOR.com’s exclusive deal with NAR that will prevent them from setting up a TREC public site.

I realize that a lot of folks are not onboard with my skeptical optimism on TREC and probably believe I have already sipped the Kool-aid. Maybe that is true, but I would encourage those who have no trust in NAR pulling this off to hold on until November. I think we will know more by the NAR Convention. Let’s just wait and see – what other choice do we have?

This is a very detailed and excellent article every agent should read.  It will rejuvenate, reinvent or depress you.  The choice, like always, is up to you. 

Would You Hire Yourself

In January, CAAR introduced a new committee structure to align the organizational governance with the new Strategic Plan and do a better job of offering members meaningful volunteer opportunities.  Okay, I realize that sounds like (and is) a bunch of association geekspeak, so a real world translation is that the new structure will help us do bigger and better things without wasting our members time. 

The old structure had 17 “committees� that struggled with enough content to justify a meeting.  The new structure has 5 Master Groups that focus our resources on the 5 key areas CAAR focuses on:

• Communications
• Public Affairs
• Professional Development
• Technology
• Association Operations

In addition to the Master Groups, the new structure is supposed to organically form “project teams� to work on specific tasks.  The idea is that the Groups will work at a more strategic level and leave the “real work� to experts on an ad hoc project team.  This will, in theory, give the Groups more time to think strategically while letting the project teams focus on the details.

So, we are now almost 3 months into this experiment and it is a good time to see how the new structure is working.  The 5 groups have all met at least twice and I have attended almost all these meetings so I could see the new structure in action.  The members of the Groups did a great job of embracing the change and working their way through logistical issues.  In addition, many project teams have been set up to carry the heavier workload.  These project teams are hard to track because they come and go pretty quickly, but my best guess is that we have already utilized between 15 and 20 different project teams and more are being formed each week. 

The real beauty of the new structure is that it allows the Master Groups to think strategically instead of having to get the day to day work done.  Over the years I have attended MANY committee meetings and I have noticed that the Master Group agenda items are far more meaty than 90% of the committees I’m familiar with in associations.  Members genuinely seem to feel that they are doing something important and worthwhile. 

And so do the members who serve on the project teams.  Here is a quote from Dolores Rogers-Nunis who has served on a three project teams already:

“I wanted to take just a moment of your morning to tell you that I love the new organizational set up at CAAR.  I just volunteered for my third project team.  Each one I have volunteered for is something I am interested in and it is focused with an end date in site.  Kuddos to the Board, the staff and you for coming up with such a wonderful idea.�

As an overall grade, I’d give the new structure a solid B+ (A for effort and B for execution).  We still need to get more people involved in the project teams, but other than that, we should be very pleased with the quick change to the new structure. 

There is a cataclysmic clash between perception and reality headed to the largest county in the Charlottesville MSA.  Over the next 10 years, the commercial tax base of Albemarle will be headed in one direction – down – while general costs and citizen expectations of services will continue to rise.  The sad part is that Albemarle, unlike many other localities, is causing this effect.  Natural economic declines have hurt some areas (mainly in other states), but Albemarle’s decline in commercial revenue is self-inflicted.

You only have to look at neighboring counties such as Augusta, Greene, and Louisa to see where Albemarle’s tax base is going.  Augusta has opened up several large retailers in the past few years – Target, Home Depot, etc. – and has plans for more.  Greene is rumored to be getting a Super Wal-mart, Home Depot, and other major retailers.  Louisa already has the Wal-mart Distribution Center and is doing major commercial development at Zion Crossroads.

Albemarle is (or was) the perfect place to be the regional retail center for central Virginia, but the County has shunned efforts by major retailers to locate within the county borders.  Recently, the developer of the upscale shopping center formerly known as Albemarle Place bailed out after years of trying to work through the County’s planning process.  Home Depot has been rejected, as well as many other high-tax-paying businesses. 

Albemarle citizens and leaders have not been shy about their negative feelings toward so-called “big box� retailers.  Keep in mind that these businesses are also called “anchor� stores because they create a base that attracts small box retailers.  So when a community rejects an anchor store, they not only lose the “big� tax revenue, they also lose the tax revenue from several small stores.

Albemarle lost a lot of tax revenue when the Short Pump Mall opened just this side of Richmond.  Now that Augusta/Waynesboro has better shopping than Albemarle, the local tax revenues are off dramatically (around a million dollars).  That decline coupled with lower real estate assessments spells trouble for the County coffers.  Actually, it spells REAL ESTATE TAX INCREASE to those who live in Albemarle.  Once the other counties come online with their major commercial developments, the business tax base will decline even more due to lower sales in Albemarle’s existing retail outlets.  People who currently drive into Albemarle from Greene to shop at Wal-mart and Lowe’s will stop right before the border and will no longer help generate Albemarle tax revenue. 

Albemarle is only at the tip of the iceberg of this situation.  Unless they do a better job of embracing businesses and attracting commercial revenues to the County, they can expect further declines in the tax base.  Citizens may not like big box retail stores, but my guess is that they don’t like paying taxes even more. 

The 2008 Swanepoel Trends Report, the best summary of real estate trends, recently arrived in my mailbox.  I’m going to provide a trend by trend breakdown to create a 10 post summary of the report.  To purchase the report for yourself, go to www.retrends.com.

Trend #1 Two Worlds; One Industry
The Evolution of Online Communities & Networks
 

The first phase of the Internet was surfing or browsing where you just aimlessly wondered until you stumbled onto something of interest.  Then, powerful search engines like Google and Yahoo let us sort through the Internet with ease.  Now, we are at a third stage where we use the Internet for sharing both personal and business information.  We share on blogs and social networks where users interact with the help of technology.

Social networking is not a new concept – the term was coined in 1954.  It first hit the web in 1995 with classmates.com and other sites.  Later, MySpace and Facebook came along and social networks soared.  As of September 2007, 1 in 20 visits to the Internet went to one of the top 20 social networks.  Americans spend about 12% of their Internet time on social networking sites.  Investors are betting that number will grow dramatically as the value of social sites soars.  Microsoft paid $240 million last year for about a 2% stake in Facebook.

The report lists 5 examples of on-line communities that are worth looking at:

1. www.linkedin.com – a business oriented social networking site
2. www.ning.com – allows users to build their own custom social networks.
3. www.squidoo.com – this is a network of experts who are sharing their knowledge
4. www.digg.com – users add stories and if other users like the content, they “digg� the story or rate it.
5. www.secondlife.com – this is a virtual world in which you can live and even do business.

Blogs are great places to share and gain knowledge.  The report list several blogs, but I would suggest the following as must reads for REALTORS® in Charlottesville:

1. www.varbuzz.com – the official Blog of the State Association of REALTORS®
2. www.inman.com/blog - great news content
3. www.RealTown.com – the blog from the Internet Crusade – a very REALTOR® friendly group.
4. www.narwisdom.com – the unofficial (and often anti) NAR site where you can take part in a frank discussion of the REALTOR® organization.
5. www.bloodhoundblog.com – Internet marketing and irreverent REALTOR® chatter
6. www.caarblog.com – this is a self-serving plug for CAAR’s own blog that delivers local Charlottesville market knowledge

Gen Y will be dragging baby boomers kicking and screaming into this new phase of the Internet.  As Sawnepoel puts it, “some of us will adapt, while the others will just watch the events unfold on YouTube.

Other Trend Reports