Why I'm here

I created this Substack because I’ve become increasingly aware of a void in the real estate conversation taking place online, and I hope in some small way to fill it. We’ve got market experts sharing their takes from outside of the industry bubble, we’ve got business-to-business (b2b) industry newsfactories peddling market quips to agents, and we’ve got the agents themselves who share their valuable direct knowledge of the market with the corrupting overlay of dishonest newsfactory messaging. What is largely missing is the intersection of sober, neutral reporting from on high with ground-up insights from the trenches of the real estate market. That is what I aim to deliver.

Before I continue, let me spill the beans on a little industry secret. There are a handful of companies in the business of creating news for agents to easily disseminate to their clients and prospects so as to position themselves as market experts. In addition to their free offerings, they frequently sell enhanced news packages directly to real estate professionals, who can then claim the content as their own. Their product is expertise, and their customers are agents. The influence of these companies on real estate messaging cannot be understated. The purpose of the content they offer is not to educate the general public so that they might make wise decisions that are in-tune with current market conditions; it is to keep consumer confidence high so that they continue paying the bills of their agents, who will in turn continue paying for content. Eventually, these companies have no choice but to come around and give lip service to what’s actually going on, but it’s always sugarcoated and always way, way too late.

As real estate professionals, we see the trends before they become numbers. They can be found in conversations between agents and their clients, negotiations on deals that never come to fruition, and listings that might have been but never were. We know what’s happening in the market before the numbers catch up. The value of this perspective is immense, especially for individuals trying to position themselves favorably amidst a changing market before the rest of the country catches wind of what’s next. The problem is that many real estate professionals, for lack of knowledge or confidence or both, simply regurgitate the messaging of these b2b sources instead of recognizing the value of their direct experience and sharing it accordingly.

There’s also an undeniable pressure in the industry to keep the messaging positive and pro-transaction. Of course every market has its opportunities, and it makes sense for agents to be sharing these with their spheres. The problem is not the presence of the positive spin but the absence of the negative one. What’s missing is the news that bodes poorly for a potential seller, or the hunch about a shift that is easier to suppress because too much business depends on the illusion of stability.

Early this past summer it became clear to me that there was no possible way for the market shift to consist of mere price deceleration if mortgage interest rates continued along their upwards trajectory. Sellers often had to drop their prices in order to attract buyers, and houses that only months before would have been gone in under a week were not infrequently sitting for a month or more. I knew that these reduced sales prices would create the “comps” upon which future prices would be based, and I saw no end in sight as long as interest rates continued to climb. And climb they did. But as late as August 30th, Keeping Current Matters (one of the principal b2b companies of the aforementioned variety) wrote the following:

The big takeaway is home prices haven’t fallen or depreciated nationwide, they’re just decelerating or moderating. While some unique and overheated markets may see declines, nationally, home prices are forecast to appreciate. And when we look at the country as a whole, none of the experts project home prices will net depreciate or fall. They’re all projecting ongoing appreciation.

Emphasis theirs. “All of the experts” to which they are referring, by the way, are none other than Freddie Mac, Fannie Mae, and the Mortgage Bankers of America. My complaint is not that KCM’s prediction was incorrect, but that I believe it was shared in bad faith.

To illustrate the reach of this kind of content, here are the first seven results that Google produces when when I search the above quote:

Here in Philadelphia, a rather average city so far as the market goes (and in no other way, let the record state) prices have already started to fall from their peak this past spring. With over half of active listings having undergone price reductions and sellers beginning to get antsy as they notice the pool of buyers dry up, I suspect we’ll see a more dramatic drop once the homes that go under contract this month settle in late October and November.

The purpose of this little diatribe is not to bash any company or agent or my industry as whole. I absolutely love what I do and I work with so many extraordinarily talented, well-informed, and ethical people. The purpose is to elevate the voices of agents and to encourage them to share what they see. Look, most of us aren’t economists, armchair or otherwise. Some of us aren’t even college graduates. But we’re the only ones who know what people are saying behind closed doors, and I would like for us to be bold enough to own the value of our insights, especially when they differ from the mainstream narrative. I will start with myself.

Welcome to Gritty City Real Estate. It’s good to have you here.