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Residential Department: Q&A: Lanny Baker, ZipRealty: October 2013

 

Q&A: Lanny Baker, ZipRealty

Lanny Baker, president and CEO, ZipRealty

Likewise, technology has changed the way that consumers research and shop for homes, aiding the homebuying process with a wide variety of online sites and tools. In addition to releasing monthly housing-trends reports, ZipRealty is a nationwide provider of proprietary technology for homebuyers and real estate professionals alike. We spoke with the company’s president and CEO, Lanny Baker, to learn more about the trends and technology shaping the real estate industry today.

Your July Housing Trends Report noted that “sales prices continue to be above 99 percent of the listing price in metros we analyze.” Will this trend continue?

I do expect it to continue. Sellers are, I think, reacting better and faster to the strengths of the buyers’ side of the market. We don’t publish the numbers here, but if you were to look at the median listed price, I think we’ll see that median listed price start moving up. We could go into a scenario where the listing prices start to go up a little faster than the transaction prices. I wouldn’t be too surprised to see that 99 percent number slide into the 98 [percent] and the high 97 percent range over the next six months. We’ll stay strong — there will be certainly a lot of markets where we’re at 100 percent or better, just given the pent-up buyer demand — but sellers are getting smart. They know there’s value out there amongst buyers, they know there’s competitiveness amongst buyers, and we’ll see a little bit more assertive or ambitious pricing from sellers.

When do you think that housing inventories will expand?

Underneath the seasonality, there’s definitely a steady increase in the amount of supply coming on the market already. And we saw that really start to loosen up, I’d say, in late May — you could see hints of it then — and in June, and I would guess that through September and into early October, we’ll continue to see the inventory rise pretty quickly. I think that as you get to October, inventory will probably flatten out, and then we’ll have another big burst of inventory in February and March of next year.

Are there any areas of the country that are doing unexpectedly well right now?

The place that surprises me the most right now is Sacramento, [Calif.]. It’s one of those markets where there’s a lot of new building, but the amount of homes that were built there in 2006, 2007 and 2008 that frankly never even got occupied in 2010, 2011 and 2012 led me to conclude — and I think many other people to conclude — that Sacramento was going to be like the lost city of extra inventory for a very long period of time. It’s amazing to me how strong that market is. You can see in our [July] report that the average price year to year in Sacramento has gone from $175,000 to $245,000, and we’re seeing that the list price and the sale price are turning out to be right on top of each other. But the statistics that really wow me are that 27 percent of the sales in Sacramento are houses that are on the market not even for seven days. Sacramento is a market where, if you put it on the market, it’s selling, and it’s selling at a good price.

How have online real estate sites and mobile tools changed the lives of real estate professionals?

The most important thing to focus on is where technology is doing things for [real estate professionals] that allow them to act and serve in a different way. Our systems and our technology — and many others, but I can speak best for ours — are designed to enable our real estate agents to focus on being a real estate professional, [to] focus on serving their customers, meeting with them, going into homes, visiting homes with them and visiting homes on one’s own, doing research, and really getting to know neighborhoods and properties in the market around them. We try to take off of our agents’ hands all the worry about where their next customer is going to come from. We’re trying to automate and analyze and use algorithms to make the whole marketing side of the real estate job automatic and more effective.

Looking ahead, what technologies do you expect to gain ground?

The thing that, to me, looks the most interesting and ripe for explosion of innovation and ideas is the homesellers’ experience. I think that, with the sort of mental construct that people have about the Internet — guided as it is by search engines and the whole search experience — it’s naturally very fitting for a buyer to think of searching for homes on the Internet. I don’t think it’s quite as natural for a seller to think, “How’s the Internet going to help me?” Just as consumers now have at their fingertips so much information about what’s for sale and what the trends are, we’re working very hard to put an equal amount of information that pertains to price and sales trends [in the hands of sellers]. That kind of focus, from a development and engineering and information-source perspective, has been historically kind of underemphasized.


 

Raymond Fleischmann was editor of Scotsman Guide's Residential Edition. For questions about this article, call (800) 297-6061 or e-mail articles@scotsmanguide.com.

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