Please read this BusinessWeek article…
Where Bottom-Fishers are Fishing?
The first time I read it I tried to make sense of it and didn’t make a big deal. Then I read it again and it managed to hit a button. Yes I am in Miami, and yes our market has been hit hard, but those of us pounding the pavement every day are surviving – so could it be I am a bit sensitive about my market?
Here’s my take – Buyers’ Markets will historically attract bottom fishers…..no brain science there! But how can you extrapolate Realtor.com’s data to mean:
What this tells you is that a lot of people are starting to bottom-fish in these markets. Whether that leads to a bottom in housing prices remains to be seen.
Wait a Minute
So because more people are searching for properties in Realtor.com, we can assume that there are more bottom-fishers? Give me a break Mr. Chris Palmeri (no offense to you but I would love to get proof of the data you used to come to such conclusions? – I’m not saying you are wrong, I’m saying that there was very little data given for me to buy the story).
Now will the rest of you around the nation that are not in these “bottom-fishing real estate markets” like Miami, Las Vegas, Naples or Sacramento, can you please tell us how you buyers’ market has not attracted bottom-fishers? Or has it?
Julie Emery
August 28, 2008 at 9:48 am
Of course there are bottom fishers. As you say, this type of market is always going to attract them. They’re certainly not the only buyers out there, but they are out in force! There doesn’t appear to be any data to support his conclusion, however. Bad journalism.
Lani Anglin-Rosales
August 28, 2008 at 10:02 am
Julie, Ines, I agree with both of you, this article is bogus.
This article did the equivalent of a journalist analyzing this theoretical statement:
to be interpreted erroneously as:
when really, the statement simply stated a fact about search trends, NOT about a reading on the thoughts behind each searcher’s motives (which I would assert could NEVER be revealed unless each user was polled directly).
I’m a huge BusinessWeek fan and will continue to read, but this article makes assumptions that are not proven in the confines of this article.
Clint Miller
August 28, 2008 at 10:11 am
Ines,
I am sooo happy that you took the time to write this! I work for an international real estate referral company, and even I was taken a-back by these conclusions. Believe me, no one gets more low end referrals than companies like mine. And Yes, there are bottom-fishers in every market. But, by the same token, there are people that have money looking in these same markets. I have actually seen an increase in referrals over the median price for homes in recent weeks versus this dramatic increase in “Bottom-Fishers”.
Id love to see the data that lead to this conclusion.
Ines
August 28, 2008 at 10:28 am
Julie – I forgot to mention something in my post and it’s the actual use of the term “bottom-fishers” – I personally find that offensive – who is not going to try to get the best deal possible when they purchase a home? Does that mean that when it is a seller’s market those sellers getting above market price are “money mongrells”? …..it’s all about supply and demand….historic market fluctuations – IMHO, no need for us to name call.
(wait…..I must be one of those “blood-sucking REALTORS”0
Lani – assumptions in journalism is irresponsible, plain and simple. We all learn as we go, but when it comes from BusinessWeek, it makes us think what else is out there.
Ines
August 28, 2008 at 10:33 am
Clint – the data is absolutely necessary – but in order to obtain that, they would have to poll local agents that are active in each one of those markets to see how many of them are dealing with “bottom-fishers” – I really hope there is data that was not shared, if not it becomes even more bogus.
Elaine Reese
August 28, 2008 at 12:32 pm
We have a few buyers that TRY to be bottom-fishers, but our market is now more stable, so those people usually find their fishing line either coming up empty or snagging the old boot.
Ines
August 28, 2008 at 1:09 pm
hey Elaine! great analogy – and same here, our market is a lot more stable – bottom fishers are the ones willing to deal with banks for foreclosures and short sales and they need TONS of patience.
Jay Thompson
August 28, 2008 at 1:53 pm
I think BW’s conclusion that increased searches at R.com means people are bottom fishing is grossly flawed.
How they come to this conclusion is beyond me. Unless they are seeing a LOT more data than they are reporting, it’s quite a leap to say “increased traffic = bottom fishing”. My college stats professor would rip them to shreds for that.
What other factors might account for increased searches in this market?
Increased media exposure – check.
Realtor.com redesign since last year – check.
Increased advertising by agents or R.com in these markets – unknown but plausible.
Changes in user demographics – unknown, plausible and certainly can’t be ignored/discounted.
Just to name a few.
Yes, people tend to “bottom feed” in distressed markets (I live in one myself), But to jump to baseless conclusions based on a very limited data set is irresponsible and {shocking!} comes off as typical main-stream media hype/hysteria.
ines
August 28, 2008 at 7:43 pm
Amen to Jay!! 😉
Louis Cammarosano
August 28, 2008 at 8:04 pm
I am not sure that businessweek’s interpretation is that far off the mark.
With prices down in some areas 40% or more, and transaction volume up as a result, it doesn’t surprise me that searches in those markets might have increased.
As Jay points out there certainly could be other factors, but I don’t think its off base to suggest the increase in searches might have something to do with buyers being attracted to lower prices (ie.bottom-fishers)
Bob
August 28, 2008 at 8:54 pm
I would agree with Louis on this. I get quite a few people looking with the assumption that San Diego is now ripe for the picking. I have had more people this month ask me about properties under $100k than I have seen since the 90’s.
I elected not to show some these properties because my kevlar vest is at the cleaners
ines
August 28, 2008 at 11:05 pm
Louis and Bob – with all due respect. There may be really bad markets around, there may be tons of “bottom fishers” but the whole point I am trying to make is that the article is making an assumption that the increase in traffic in R.com means more bottom fishers. It’s the assumption that I find irresponsible – it’s the “no data” given that I find absurd.
There are many factors that affect traffic into a website and you cannot make a baseless assumption without facts and data. Maybe I can say that the traffic in my own site has increased from 4,000 unique visitors per day to over 5,500 per day in the last 2 weeks because there are more color blind Europeans looking for homes in Miami – absolutely absurd. (and for the record……I love each and every one of my European clients and they are not all color blind)
Glenn fm Naples
August 29, 2008 at 6:20 am
Commenting on the Naples real estate – I have seen an increase in searches on my site. There has definitely been an increase of inquiries on the lower price ranges. IMHO – the reasons for this are – prices have declined to a point where those priced out of the market can now enter the market, potential short sale listings priced so low that they are unreasonable for a lender to accept, and comparison of prices from 2 years ago to prices today. This last one really causes me to scratch my head – because a good deal is purchase price versus market value. Too many say you can now buy a house for $250k today, when 2 years ago it was $500k. There is no logic to those statements.
Louis Cammarosano
August 29, 2008 at 6:34 am
Ines I think Palmieri was drawing a correlation between the number of visitors and the decline in prices.
While as Jay points out there may be other factors and the two facts may not be correlated and he certainly did not prove it or back it up, its still an inference that could be drawn from the two facts.
When people line up out side Walmart at 5am the day after thanksgiving, one might incorrectly and with out adequate data draw the inference that these are bargain hunters. Certainly not all of them are, some just don’t have better things to do at 5am on a friday morning 🙂
Bob
August 29, 2008 at 7:04 am
Ines, my money says that the assumption is not baseless, but that the article does a poor job of explaining how the conclusion was reached.
If R.com’s traffic is up, with a corresponding increase of searches in the low ranges – at a rate that is higher than historical numbers and/or trends, then the assumption is not baseless.
My own historical data goes back 6 years and covers over 100k registered search users, not merely uniques, and their searches. My recent traffic measured against the historical trends of my data would suggest a similar conclusion.
ines
August 29, 2008 at 7:20 am
Glenn, increase in searches in the lower prices ranges does not mean bottom fishing. I totally agree with the statement that people that could not afford before, can afford now. I’m seeing traffic from people that were renting who are now buying – that can mean 2 things: that the market is stabilizing and they feel more comfortable about buying now, or that they could not afford before and they are now they can.
Louis, and some of those 5am shopper are just gung-ho shoppers that love the experience (you will never find me in any of those super sale days even close to a mall – it freaks me out) – I think we agree on the problem of “inferences”
Bob – you gave more facts in your one line statement than the author of that BW post. We also need to define “bottom fishing” – one thing is for people looking for lower price ranged properties and something totally different is for people bottom fishing.
I can tell you that 3 months ago I was bombarded by European and South American inquiries of $200k condos on the ocean in Miami Beach. These people heard that our market was doing poorly, so they assumed that those type of properties were available – a lot of them ended up buying $400k-$500k units, but I cannot define them as bottom-fishers because of their original inquiries.
Louis Cammarosano
August 29, 2008 at 8:24 am
Ines
I agree inferences (the increase in searches is due to lower prices) and semantics (the term “bottom fishers”) impact people differently.
I was neither offended by the plausible conclusion of Palmieri’s newsweek blog post even though such conclusion may not have been arrived at through the scientific method, nor was I offended by the term bottom fishers.
While I may not agree with Palmieri’s inference drawn or the characterization of the searchers, I am sure a large percentage of intelligent people might have also drawn the same conclusion and made the same characterization of the searchers.
Thanks for pointing out that a large percentage of intelligent people could draw different inferences and chose to name those doing the searches something more benign than bottom fishers.
Benn Rosales
August 29, 2008 at 9:20 am
If the article had not led nor ended with a name call, this conversation would not be taking place. Had he simply said pricing gives the best reason all year to search for homes we would have cheered- but that would have been a constructive, productive, non-event.
I actually do believe that the negative play on words does a great job of saying something constructive to the market, whether he intended to or not- it says to buyers of those markets something great is happening, and this is your moment, so get out and find yourself a great deal.
I’d like to think that BW put a lot of thought into the psychology of their statement, but I have no data to support it so we’ll just go with “Title Fail” for the moment- but would give two thumbs up to the probable reaction of a buyer reading the article.
I’m just walking away from the BW article with a smile, because at the end of the day, it’s good news for those folks in those markets.
Louis Cammarosano
August 29, 2008 at 9:26 am
Benn
I like your assessment of the newsweek blog post. Its the subtle manipulation of words, nuances and inferences drawn from data that gave the blog post it overall effect.
However I disagree with the statement “its good news for those folks in those markets”
Good news perhaps for home searchers who may now be able to afford a home, and good news for realtors and lenders who may see an uptick in business, but certainly bad news for all those losing their homes…….
Benn Rosales
August 29, 2008 at 9:40 am
Louis, you make a fantastic point, there are some variables that would certainly be bad news to an owner or seller- but I’ll tell ya, my friend Tom who just got out from under his home in a shortsale appreciates very much the buyer who saved “his neck.” He understands that it wasn’t the best result, but he still feels he did all he could to save his home.
That’s just one story, but it demonstrates my belief that buyers are the key to firing up the market regardless of the motivation.
Thanks for pointing out the variables.
ines
August 29, 2008 at 12:18 pm
Thank YOU Louis for understanding my point and putting it in such eloquent words.
Benn – I guess good new will be bad new for someone else and vise-versa…..especially in real estate. It goes back on the way we should be responsible and accountable for communicating data – take a look at Tom’s article