Everywhere I go people are talking about housing. So it wasn’t a surprise to have a market conversation with a hair stylist while flying to Texas last week. We talked about real estate bubbles and mullets. Anyway, here’s a few quick takeaways and some thoughts after attending an amazing conference called AppraiserFest.
Of course I shared this conversation on Twitter:
TAKEAWAYS:
1) Opinions: Everyone has an opinion about what the market is doing or will do in the future. These days when I meet people I tend to ask them what they think is happening, and I’m always grateful and fascinated to hear responses. The truth is I like to hear opinions, but the bigger issue is an opinion without influence from local data isn’t that meaningful, whether it’s from a hair stylist, economist, or real estate professional.
2) Local data: The only thing that really matters right now is local data. What do the stats say the market is doing? What is the word on the street? What are we hearing from sellers and buyers? What is normal and not normal for a slower fall season? More than ever we need to pay attention and sometimes sift through the hype of doom & gloom real estate headlines too. This market presents us an opportunity to be objective, honest about not knowing the future exactly, and creative to find ways to describe what the market is doing. On a side note I’ll have my big monthly market update posted next week.
3) Mullets: Speaking of mullets, six years ago I helped coin the term “parcel mullet” to explain the phenomenon of having a short lawn in the front and a long lawn in the back. Either you think that’s hilarious or now you know I’m immature.
REAL ESTATE “ISLANDS”
I just got back from a conference called AppraiserFest. It was incredible to hang with nearly 300 other appraisers for a few days in San Antonio. I was honored to speak too. Anyway, here’s a couple of things on my mind that I wanted to share as an encouragement to real estate professionals.
1) Islands: It’s easy in real estate to go about things alone or be an “island” so to speak. But growing professionally and learning often involves intentionally being around people who will help us grow. I know this seems basic, but often appraisers are solo artists and completely isolated. That’s not a good thing, and it’s one reason why it was so powerful to see appraisers come together.
2) Finding people: With so much talk about the market changing, it’s critical to be surrounded by people who are accurately interpreting the market and helping us think through issues. My encouragement is to find others to help you think out of the box when it comes to real estate trends (and being successful in any market). I realize that’s a bit vague, but it’s something that needs to happen. As a side note I read Jonathan Miller’s Housing Notes every Friday without fail, and that’s one practical thing I do to help keep my mind sharp. For me Jonathan is one of those people who speaks into my life from afar and I’m better for it. That’s one reason why it was a real pleasure to meet him in person this past week.
I hope that was interesting or helpful.
Market update video: Here’s a video I did with Realtor Doug Reynolds a couple weeks ago to talk through the fall market. Check it out if you’d like. If you want to do something like this too, let me know.
NOTE about this video: Someone asked me how much I charge to share a video with an agent like the one above. In short, I will NEVER do that. I shared this because I was in the video and the content is worth digesting. I did this video for free with Doug and that’s what I do with everyone. I have a couple more video shoots on the docket and I may share those eventually too, but only if they actually fit with what I’m saying. If a video doesn’t add value or fit within what I’m trying to say, then it won’t get shared. Make sense? Hopefully so.
Questions: In what places are you having real estate conversations lately? What voices are you listening to right now that are helping you grow and think through the market?
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Ryan, you speak into my life from afar. I’m excited you attended AppraiserFest and sorry I missed it.
That’s so nice of you to say Gary. Thank you. I feel the same about you. Your name came up several times at the Fest and I think everyone is impressed with what you are doing in Portland. Keep up the great work. Hope to make it up to you again at some point. Oh, I actually met a few people from your NAIFA group at the Fest.
My example is anecdotal, yes, but so is almost everything.
Nearly every family we know now has a real estate agent in it. Everyone and their mother is licensed, again.
I’ve been a 100% full-time RE investor for 15 years and live off of my passive income. That is how I derive my income and that is exclusively how I retired young. Real estate–and doing it right by studying from seasoned mentors when I was younger and reading and studying, a lot.
That being said, the last year I’ve gotten lots and lots of RE advice from the following three people: 1.) a recent RE licensee who is a high school graduate and was fired from a string of retail jobs prior to that
2.) The guy that used to sell me shoes at Nordstroms when I was a RE broker still many years ago. He is now licensed and a “investor” (wholesaler) and agent.
3.) A newly hired psychiatrist at Kaiser who is a family friend and doesn’t even have a basic understanding of RE. If I simply asked him what a cap rate or GRM was he would not have a clue.
These are just three examples of who is dispensing RE advice in my life. They all know I am successful in RE and have been doing it a long time yet they still have advice.
The old saying, ‘don’t confuse a Bull market with genius’ comes to mind.
There is too much excess in the RE market right now. It is massively oversaturated with bozos, again. The market is really good at trimming fat when it corrects. Just like last time, the shoe guy will go back to selling shoes where he belongs. And the gal back to Wet Seal or wherever selling frayed T’s.
That isn’t an insult to all shoe guys or torn jeans sales ladies, it’s just that RE done properly should not be so low barrier to entry as it is now. When it is you know you are at peak pricing and a mean reversion is coming.
“When your barber starts talking about puts and options it is time to sell your stocks” said Peter Lynch was it? I have forgotten now. Maybe it was Peter. Well, your shoe guy is talking about how to get rich in RE. We all know what happens next.
The hair stylist talking about RE is only one of the many time-tested metrics for identifying what part of the market cycle we are in. Another is early lease cancelations on luxury vehicles. Time on market, inventory, foreclosure starts etc. You get the idea. This sucker is going down. Nothing seasonal about it. Cyclical bear market for RE is here. I’ll come and collect my prize once you all arrive at the same thing in several months.
Interesting post Mr. M. My Uber driver on the way home from the airport asked me about real estate investing. She was interested in getting started. In this case, she wanted to learn instead of trying to offer wisdom.
That’s cool Joe. I appreciate her desire to learn. It all starts somewhere, and it’s always impressive when someone is asking questions rather than just talking. I just hope she doesn’t attend a celebrity flipping seminar. Hopefully she can connect with locals who know what they are doing.
On a side note my Uber driver in Texas has a son that plays video games professionally. He says his son won a $100,000 prize one time. What a wild world we live in…. I think that’s the job kids these days want (or a YouTube star). My other Uber driver was a mom with two kids under three. She’s just crushing it trying to earn some income. It sounds like she’s actually working two jobs too. It’s amazing what you can learn when driving with someone.
My strong advice to her was to avoid the seminars but instead to find a mentor. I told her about the income approach but what can you say in a short ride?
That’s great Joe. Nice job. I think at the least she knows where NOT to look, and that’s a good place to start. I always tell newbie investors about Bigger Pockets too.
Love the comment Mr. Miyagi. Thank you. This reminds me of that scene in The Big Short where Steve Carell discovers the dancer owns five houses and then concludes for sure it was a “bubble.”
I hope people get the spirit of what I am saying here. Real estate advice is only good if it’s coming from a place of being informed by local data and an understanding trends. Simply being in the profession or even licensed is not the prerequisite to dispense advice. The same holds true with having a driver’s license. Just because you have one doesn’t mean you’re a good driver. Or just because you live in a house doesn’t mean you’re a good neighbor. Or….
On a side note, I know a former hair stylist who is really crushing it in real estate in Sacramento. I hope she reads this post. She’s doing an incredible job for lots of reasons, but I think her people skills are off the charts.
Anyway, thanks.
I agree that Appraiser Fest was a great event. I’m so happy I made the decision to attend. Love how positive everyone was.
And I agree-the appraisal industry really needs to do a better job of connecting.
Thanks Joe. So glad we got so much time together too. That was fun.
Great post Ryan! I had never heard the term parcel mullet until your post. I totally know what you’re saying. I live it! Nice word-smithing. I agree with you that we can really benefit from getting to know other appraisers and share experiences and knowledge with one another. I really enjoyed all of the time I was able to spend visiting with you, Tom, Bill, Joe and others at the AppraiserFest and deepen our relationships! You are truly a gem in our profession and a true friend!
Thanks Jamie. I feel just the same. The content of AppraiserFest was great and it spurred my thinking, but the relationships were even better. I’m so glad to have met in person and I look forward to next time.
Glad you are in the know now about parcel mullet. 🙂
You do have to watch where you receive advice from, but sometimes the novice may have the edge. It was the main point in, One Up on Wall Street, by Peter Lynch. That philosophy made all the difference to me in my early career as a painting contractor. I was not afraid to move into investing of any kind and, I think, it has made all the difference. I wonder how many people went out and sold their stocks or real estate when this painting contractor started extolling the virtues of investing. I will also listen to the stylist that cuts my hair any time. She managed plenty of rentals through the last market downturn, lost some, but came out pretty well. You just never know where you will find the next pearl of wisdom. I hear far too many people worry about risk and losing their money. The real risk, imho, is doing nothing and ending up retired with no investment income.
Side note, my stylist has also kept me from going back to the mullet of my early days. That and a lack of hair in the appropriate places!
So good Ray. I think your comment underscores the truth that wisdom can come from many different places, and it doesn’t just have to be in the form of hardcore market stats to be fair. Sometimes wisdom comes based one experience, and you stated that perfectly. I completely agree about people being paralyzed by fear too. That’s true in so many different areas of life. We can never seen change if we don’t inch toward a goal and start doing something different. Persisting in the same old stuff gets that exactly – the same old results.
Congrats on not going back to a mullet too. Though I’d love to see that. It would be a good look for you. 🙂
For the mullet, I would need a wig! Lol.
Love this post! My motto has always been “leave it to the professional” I would much rather get advice from someone who has a vast amount of experience in a field than someone that might know a little from some information they got from their aunt’s second cousin’s brother in law. Oh,I know this first hand as I went through a phase where I colored my own hair, not good- I went back to using a professional stylist. Live and learn…… Thanks for sharing about the Appraiserfest. It seems like a wonderful event. I would have loved to have been there and to have met many of you who speak to me from afar as you say. You are definitely one of them!
Thanks Shannon. You are too kind. I look forward to meeting in person one of these days.
So true about professionals. I learned something similar with health insurance. We have used a broker to assist us, but I decided a couple years ago that I could navigate Covered California (Obamacare). Nope. It did not work out well. The broker was able to log on and save us lots more compared to what I tried to do. Lesson learned.
Great post, Ryan. It’s funny to hear peoples take on a subject, especially when we are more knowledgeable. It was great meeting you and everyone else. I agree that appraisers should get together more often because it really does help us to grow as professionals. Here’s hoping it won’t take us another 8 years to get together. 🙂
Thanks Tom. I’m sure the next meeting will be much sooner than 8 years. Hey, maybe even next year at the Fest.
Great info Ryan, as usual! Thanks so much and Happy Thanksgiving to you and your family!!!
Thank you so much DeeDee. Happy Thanksgiving to you!! I hope you get to take some time off this week to relax.