Yesterday, a client sent me an online article from the Boston Globe (Open houses waste of time?) and asked what I thought about it. After reading the piece, I did have some thoughts—not only about this article, but about some of the irresponsible journalism on the internet. In my mind, this article is an example of a freelance writer trying to capitalize on the fact that real estate is a hot topic. I’ve seen more and more of this type of article as our housing market improves. The author (a freelance writer named Scott Van Voorhis) states: “If your agent wants to do multiple open houses, then it’s worth asking some tough questions.” It occurred to me that it’s time to ask this writer a few questions:

1. Why are outdated sources sited as current in this article? The only source cited by the writer is on MSN real estate. The MSN article does not have a publish date. Most reputable publications cite the original date of their stories at the top of the article. Look at any article from The Wall Street Journal or NY Times, for example. The data in the article he cites is old and was originally published in 2009 (see the first reader comment at the bottom of the MSN article). The writer at the Boston Globe cites the MSN article as if it were current. It seems to me that this is incredibly poor and lazy journalism. It’s been my observation that freelance journalists are writing increasingly sensationalistic or provocative pieces in the hopes of getting picked up (and possibly paid) at the expense of many others (including, but not exclusive to, those in real estate).

2. Why does the writer position the topic as applicable for national real estate marketing? The reality is that nobody can accurately write about real estate marketing trends and practices on a national level, and it is irresponsible to try to do so. All markets are local and trends, practices, and laws are different from city-to-city and state-to-state. All of which are critical factors for what is appropriate to market a property. The writer should clarify which market(s) he thinks this topic applies to—it certainly doesn’t apply here.

3. How does the writer justify the inaccurate goals and objectives he cites in his article? The author states that the goal of an open house is to hit the “jackpot” which he defines as someone “falling in love” at the open house and writing an offer immediately. This is not the main objective of an open house—at least not in our local market.

The goal of an open house here on the mid-peninsula is to make the property easily accessible to “real buyers” who are actively looking for homes. The majority of buyers in our area don’t want to be accompanied by an agent to view multiple properties over the entire course of their search. Once they’ve narrowed their search to one or a few desired properties they look to their realtor to review these finalists with them for their professional opinion regarding location, price, disclosures, etc.

The bottom line is that open houses do work for our market. Marketing practices which do not work and waste people’s time are not used for long.  I can relate stories every week when having an open house is a critical part of a home being sold in our area.

Most writers are fair and thorough in their writing and research, but the few who aren’t don’t help anyone but themselves with their practices. I hope when reading articles and blogs online everyone remembers to verify where the information came from and think about how applicable the it is to their situation and location.

While there are a number of factors affecting demand in our current market, one place to look for an explanation is consumer confidence. Consumer confidence has always been one of the primary driving forces when it comes to demand for real estate.

It’s simple if you think about it: if you’re not feeling confident about your job, the economy, etc., then you won’t be inclined to make one of the larger investments of your lifetime. With that in mind, I’d like to point out that even with a slight dip from February, consumer confidence was at 70.2% last month in March compared with 40.9% in October. That’s an increase of 29.3 percentage points in 6 months. For more details visit this Consumer Confidence Survey Synopsis . You can also check out the Bloomberg Consumer Comfort Index for more data on consumer confidence.

What will happen throughout the rest of April and May? More strong sales figures and more inventory coming on. The next two months are typically two of our busiest. Right now there is very little that is “typical”, but hang in there, and stay tuned.

Inventory this week is still extremely low–frustrating many qualified buyers (and Realtors). Along with many of my colleagues I have been mailing letters and contacting homeowners to tell them about the amazing seller’s market that we are witnessing. I’ve had some success, but this has not generated nearly enough new inventory to satisfy the enormous buyer demand right now!

My message to anyone thinking about selling a home this year involves something I call  “Facebook fear”:

• Many buyers are scrambling trying to secure homes purchases right now in fear of more competition later this year (primarily from Facebook employees)–along with the possibility of higher interest rates.  It’s hard to imagine that demand can increase any more from where it is right now.
• Many home sellers are waiting to list their homes until after Facebook goes public in May. If you need to sell your home this year, don’t wait—you’ll also be waiting varying amounts of time before Facebook employees can cash out and sell their stock. Right now is the best sellers market we’ve seen in our local market in years.

All homeowners wanting to sell this year—especially those with homes that have imperfect features or less then ideal locations—can benefit from buyer demand right now.

Some home sales over the past week just from my Palo Alto Alain Pinel office:

• Downtown Palo Alto condo, listed for $995,000: 8 offers
• Palo Alto small home, listed for $1.195.000: 6 offers
• Midtown Palo Alto home listed for $2,000,000: 2 offers
• Los Altos home listed for  $2,000,000: 4 offers
• Los Altos home listed for $1,600,000: 7 offers
• Palo Alto home listed for $3,595,000: 7 offers
• Palo Alto home listed for $949,000: 16 offers

Last week in Palo Alto my office had a listing in the Community Center neighborhood priced at $2M that received 6 offers–
4 were all cash and it sold for over 10% above the asking price. Another home in the Downtown North neighborhood listed
for $1.2M had 7 offers—this one sold for almost 10% over list price. The competition is fierce for buyers and I don’t anticipate any let up soon…

The open houses I was at last weekend were swamped. Other agents I spoke to confirmed that open homes in almost every neighborhood and community had the same level of traffic. A new listing price at $2.2M in the Barron Park neighborhood of Palo Alto had 100+ groups go through on each day. Our Los Gatos office is reporting big numbers again meaning that the level of competitiveness for homes is starting to spread…stay tuned.

My input: If you’ve run the numbers and buying income property is an investment you’d like to move forward with, location is the MOST important thing to consider. The tip in the WSJ article about buying rental properties in your immediate geographical area is a good one, I think. Even though prices can be lower elsewhere, maintaining properties remotely can be very difficult. Safe neighborhoods near good schools and public amenities like parks, public transportation, and shopping districts are especially attractive to renters. What type of property are you interested in buying? Condominiums can be a good choice for first-time investors. But they appreciate more slowly and command smaller rents. Single-family homes tend to attract longer term renters. Also, don’t forget duplexes, triplexes and fourplexes which are great investment opportunities.

This is what I absolutely love about living here on the Mid-Peninsula. We have many, many strong points of view about important topics such as education in a very small geographic area. The intellect that surrounds us locally is just amazing. Our choices in education here range from excellent public schools to a variety of independent school models—whatever your views on childhood education may be, it’s almost certain that an option exists here which will work for you and your family.