Rapid fire and random thoughts - Part one
Is it just me, or does it seem that every new day brings with it greater difficulty in finding
the truth? I enjoy doing research - perhaps in some cases, too much research - into a variety of topics, whether they be political, geopolitical, economic, or having to do with human nature and tendencies. And though it is at times a challenge to find and to separate the wheat from the chaff, there are places that I feel you can still get good, quality information I decided to dedicate the next couple of articles to some of the random thoughts, bits of information and things worth pondering that I have come across recently. Some are related specifically to real estate and the economy. Some are simply topics that have peaked my curiosity and others are things I have accidentally discovered while satisfying that curiosity. I hope that you enjoy!
Fun and games at the Fed: There is so much going on at the Federal Reserve the vast majority of which is happening without the general public’s knowledge. One of the interesting things about the “Fed” is that the chairman is appointed by the President of the United States to a four year term.
This position is currently held by Jerome Powell, who was nominated by President Trump in 2018. This means his term is up in February of 2022 and President Biden will decide to reward
him with another term, or choose to appoint another Chair instead. This is where the road forks and things get interesting… We all know that no President wants to have the economy stumble during their time in office. This is common sense. However if the stumble does occur, the ability to have a scapegoat becomes of ultimate importance. If that scapegoat happened to be someone that was appointed by the previous administration, then all the better. So do we see a new chair in 2022 with hopes that they are willing to play along with the progressive monetary policies currently being pushed, or does Powell retain the seat
for a another term and risk having his hands on the wheel if and when the economic train goes off the track? It will be interesting to see…
Zillow proved a point… It just happened to be the wrong one:
Zillow announced this month that they have decided to immediately shut down their iBuyer program. Initially launched in 2019, the program (and the company in general) has been thought of by many as the canary in the coal mine for real estate professionals. Internet real estate companies such as Zillow and Redfin have touted their algorithms and cost effectiveness as reasons for the demise of the traditional real estate model. After all, why pay an agent when you can just sell or buy a home with a few clicks of the mouse? My contention has always been that while real estate has changed dramatically since the advent of internet real estate services, you ultimately cannot ever replace the actual face-to-face relationship between a client and their Agent. The experience and knowledge (especially local market knowledge) that good Agent brings to the table is something that cannot be overstated. Upon announcing the closing of their iBuyer program (and cutting nearly 2,000 jobs in the process) Zillow CEO Rich Barton stated that “We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated…”
With losses totaling over $540 million from the failed program, Zillow has proven a point completely
contrary to the one they were trying to make all along… That everything can be done online and that the savings will be worth it. Instead, they have highlighted the fact that true professionals involved in the many steps of a real estate transaction will always have a valuable role in the process.
*This is part one of a two-part series. Look for part two in the upcoming Enterprise Record - Northern California Homes and Properties Edition.
Dan Bosch is a Realtor Associate with RE/ MAX of Chico and the team leader for the Premier Professionals Real Estate Team... Dan specializes in residential and investment properties. He can be reached at (530) 8969330 or via email at danbosch@sbcglobal. net. You can also follow him at @dan_bosch on Instagram