How the Internet and Craigslist are Transforming the Real Estate Industry

For more than fifteen years, the Internet has been transforming the real estate industry, a phenomenon that virtually all real estate professionals are aware of. The number and variety of real estate web sites have proliferated and are increasing even to this day, and there is no end in sight.
Without a doubt, the Internet has facilitated sales of American homes to foreign buyers. The ability to browse through pictures and property information at will from anywhere on the globe at any time has had immeasurable effects.

This influence is increasingly noticeable to American Realtors on the beat. Between April, 2009 and March, 2010, 28 percent of agents worked with at least one international client, compared to only 23 percent, only one year prior. Next year’s figure is likely to be even greater.

Realtors, as an organized professional group, did not track foreign purchases consistently prior to 2008. However, in 2010, these sales equaled a staggering $66 billion!

Yet the influence of the Internet is so much broader than that.

One of the most formidable Internet-marketing giants in history promotes — even exhorts — purely local commerce. Craigslist, developed in 1995, now has 50 million unique American users. That means that approximately one in five American adults has a registered user account. Probably, there is still room for considerable growth!

The capacity of Craigslist for reaching the local consumer market is simply unprecedented. Upon typing “craigslist.org” into their Internet browsers, users are routed to their local Craigslist web site — no querying or searching required. Craigslist currently generates 20 billion page visits each month. It maintains more than 700 localized web sites. (By contrast, there were only 32 Craigslist web sites in 2003.)

Bargain hunters of anything from furniture to baby strollers to home school curricula are drawn to the site. In fact you’ve probably accessed the site numerous times. Posting ads is often free, making it appealing to sellers, too.

Craigslist is surprisingly safe given the freedoms bestowed to users. It has very effective self-policing programs in place to eliminate much objectionable, dangerous and redundant content. Craigslist is not infallible, however, meaning users must still use caution. On the other hand, the simplicity of the site makes it hard for anyone to resist!

For their part, more and more REALTORS® are posting brief descriptions of their listings on Craigslist, steering buyers to their own web sites to get more details about the properties. Once a shopper becomes interested in such a property, the rigorous requirements of MLS advertising means they have access to information that is checked, validated, and disclosed in much fuller detail.

For property owners and REALTORS®, use of Craigslist is even more widespread and accepted. This is because this market is more oriented to a youthful, Internet-savvy customer base.

So, as a real estate professional operating in an increasingly competitive industry, it’s important to jump on this bandwagon — if you have not already done so — and start utilizing the benefits of Craigslist.

By: Andy Asbury

Bank of America Faces More Foreclosure Headwinds

By Dave Kansas

As Dan Fitzpatrick points out in his Journal story, “the bank uncovered these mistakes while preparing less than 1% of the first foreclosure files that it intends to resubmit to the courts in 23 states.” In other words, could just be tip o’ the iceberg.

Wells Fargo could also be in some hot water. Dan notes that shortly after WFC CEO John Stumpf said earlier this month “in our company the affidavit signer and the reviewer are the same team member” a deposition in a court case indicated that WFC does use the dreaded robo-signers that have gotten BofA and others into so much hot water.

The scale of the mortgage foreclosure crisis remains unclear, but the biggest banks, including J.P. Morgan Chase, have varying degrees of exposure. BofA, in large part due to its Countrywide Financial acquisition during the 2008 financial crisis, appears most exposed.

That’s how the market sees it, at least. Bank of America is down about 15% since the crisis broke earlier this month. J.P. Morgan is down about 6% and Wells Fargo is flat.

Bank of America Corp acknowledged some mistakes in foreclosure files as it begins to resubmit documents in 102,000 cases.

from Reuters

The bank found errors in 10 to 25 out of the first several hundred foreclosure it examined starting last Monday, the newspaper said.

The problems included improper paperwork, lack of signatures and missing files, as well as cases in which information about the property and payment history being unmatched, the Journal said.

The bank told the newspaper that some of the defects seem relatively minor, and the bank has not found any evidence of wrongful foreclosures.

The bank found the errors while preparing less than 1 percent of the first foreclosure files that it intends to resubmit to the courts in 23 states, the Journal said.

All 50 U.S. states have started a joint investigation of the mortgage industry, focusing on allegations that, for years, banks have not reviewed documents properly or have submitted false statements to evict delinquent borrowers.

Bank of America spokesman Dan Frahm told Reuters: "We are not claiming perfection, nor can we. We are committed to getting our process right and giving our customers confidence they are being treated fairly."

(Reporting by Jessica Hall in Philadelphia and Anand Basu in Bangalore; Editing by Lincoln Feast)

REAL ESTATE WATCH: GREATER LOS ANGELES - Slow Rebound for Greater L.A. Commercial Real Estate

From the OCBJ

OFFICE MARKET

The economy in greater Los Angeles is starting to emerge from the recession, though at a slower pace than other markets.

The housing market has begun to stabilize. But the area’s unemployment rate remains high at 12.6%, and the rate of job growth during the next few years will be modest.

The office market has seen a downturn during the past few years.

Weak demand caused by tenants continuing to evaluate their financial strategies has contributed to the lack of any bounce back in the near future.

The majority of transactions secured during the first three quarters have been renewals, furthering the belief that tenants are attempting to capitalize on the favorable market conditions with lower lease rates and generous concession packages.

In many cases, these tenants also are foregoing shorter extensions in favor of signing longer leases.

At the end of the third quarter, the overall vacancy rate was 18%, up from 17.4% in the second quarter. On a positive note, the rate of increase has been slowing compared to previous quarters.

Another positive sign is that the amount of sublease space has continually declined in the past year.

At the end of the third quarter, there was just more than 3 million square feet of sublease space on the market compared to nearly 4 million square feet at the same time last year, representing a 23% drop in the past 12 months.

The absence of substantial construction will continue to shorten the recovery time of the local market.

Tenants will expand by leasing space from what’s currently available, which will allow for much-needed relief to the rising vacancy rates.

INDUSTRIAL MARKET

During the first half of 2010, the economy appeared to be recovering from the recession at a more robust pace.

But recently, economic trends toward recovery have slowed. Although the housing market has begun to stabilize, growth in retail sales has slowed, continued jobless claims point to minimal employment gains, and the manufacturing sector has slowed from the first quarter’s strong performance.

Although the economic indicators remain relatively weak, the greater Los Angeles industrial market continued to outperform many others across the country.

During the first three quarters of the year, the industrial availability rate dropped from 8.3% at the start of the year to 7.6% at the end of the third quarter.

A portion of this drop can be attributed to users taking back space that previously was on the market as they prepare for an expected increase in activity. But a noticeable increase in tenant activity also has had a positive impact on the market.

Total gross activity for the quarter was about 10.7 million square feet in greater Los Angeles, up from 8.2 million square feet during third quarter 2009.

Net absorption also was positive during the quarter, totaling more than 2.6 million square feet.

This was the second consecutive quarter and only the second time since fourth quarter 2007 that the market experienced positive growth. In the previous 10 quarters, the greater Los Angeles market averaged negative 1.6 million square feet of net absorption per quarter.

During the next six to eight months, the market should continue to see modest activity levels as firms begin to hire again with increased consumer spending.

Companies will continue to rebuild in- ventories as the demand for industrial space continues to rebound. But the average quar- terly pace still will be below the levels during the last housing boom and economic recovery period.