It seems like such an obvious question to ask ourselves in retrospect, but I admit that I never thought about this before. Until I read this paper from the Federal Reserve Bank of Cleveland titled "Why didn't Canada's Housing Market Go Bust?"

Although this paper was one of the most digestable Fed papers I've ever seen, I'll still save you some trouble and summarize it for you:

It wasn't low interest rates which caused the US housing crisis. After all, Canada has a similarly monetary policy during our run-up. The difference between the two markets was that lending standards were much looser in the US than in Canada, and that has allowed Canada to avoid the foreclosure crisis we're now experiencing. From the paper: "The Canada and U.S. housing market comparison suggests that relaxed lending standards likely played a critical role in the U.S. housing bust. Monetary policy was very similar in both countries from 2000 to 2008, but housing prices rose much faster in the U.S. than in Canada. This suggests that some other factor both drove the more rapid appreciation in U.S. prices and set the stage for the housing bust. A likely candidate is cross-country differences in the structure and regulation of subprime lending markets."

If you have an interest in the US foreclosure crisis, this paper is a must read.

 

 

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In this interesting working paper from the Altanta Federal Reserve, economists look at every residential mortgage in Massachusetts from 1989 to 2008 to determine the cause of the foreclosure crisis. They conclude that home price depreciation was more to blame than lax underwriting standards. Lax underwriting didn't help, but it wouldn't have been such a big issue were it not for declining home values.

From the paper's abstract: "...[we] conclude that the foreclosure crisis was primarily driven by the severe decline in housing prices that began in the latter part of 2005, not by a relaxation of underwriting standards on which much of the prevailing literature has focused. We argue that relaxed underwriting standards did severely aggravate the crisis by creating a class of homeowners who were particularly vulnerable to the decline in prices. But, as we show in our counterfactual analysis, that emergence alone, in the absence of a price collapse, would not have resulted in the substantial foreclosure boom that was experienced."

 

It's important to remember that underwriting standards were different in different geographies, as did the rates of home value decline. So I wouldn't extrapolate from this Massachusetts study to conclude that lax underwriting standards weren't a primary cause of the foreclosure crisis in California, for example.

One tip for you on how to use Zillow data to look at some of this info... Go to the "Local Info" tab on Zillow and type in a city, state, neighborhood or county in the search bar. They click on "home values" on the left side. Click "more metrics" on the left side and they look at the two foreclosure metrics -- "homes foreclosed %" and "foreclosure re-sales". You can then embed the graphs into blog posts. For example, here's Boston's foreclosure % over the last 10 years.

 

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Via Sara Bonert {Real Estate Internet Marketing} (Zillow):

I have an investment property in Florida. In the last three years, twice I’ve listed it for sale. Twice I’ve ended up renting it. Twice I’ve relied on my agentto help me with the decision making that took me down this path to simply get the home occupied. It is a big reality that today’s real estate market is forcing many people, like myself, to wear the landlord hat because of market conditions.

Today I am excited to announce that Zillow is expanding its marketing services to not only include homes FOR SALE, but now also include the ability to market homes as being FOR RENT.

Zillowhas always been a little different than other real estate sites because our foundation is a data base of ALL homes, not just homes that are currently on the market. Today we have about 93M property records on the site, with about 3.6M of them having been flagged as being for sale. Because of this, we get people in all stages of home ownership, from renting to buying to owning.

According to the U.S. Census American Housing Survey 2005, there are 34M rental households in the US, with 53% of rentals being 4 units or less and 30% being single family homes. And when we look at the 8M+ people that visit Zillow each month, nearly 1M of them are exclusively renters with untold others “on the fence” on whether to buy or rent.

So what is Zillow’s new product?

  • Zillow offers a Featured Rental Listing for just $9.95 for 180 days. Featured Listings are sorted to the top of search resultsand receive six times more views than non-featured listings.
  • Rich rental listings can be created with unlimited photos and detailed property information, and you only have to post this information once for up to 180 days.

How will people find my Rental Listing on Zillow?

  • Of course we’ll have the standard search, but we couldn’t just stop there.
  • Zillow has built the industry’s first search by monthly payment– allowing users to simultaneously search for homes for sale and for rent based on a monthly payment they can afford. (monthly payment on homes for sale will be calculated using that day’s mortgage rate for a 30-year fixed mortgage rate, assuming 20% down)

Zillow’s goal is to help people make intelligent and informed choices in all stages of life – whether they are renting, deciding whether to rent or buy, shopping for a home today, refinancing, remodeling or just dreaming. With the addition of rental listings and search, we are giving our users another tool to help them throughout their decision making process.

Click here to experience the For Rent search on Zillow.

Announcement on the Zillow Blog.

Post a home for rent.  

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I try to keep most of my blog posts here focused on real estate, but I also love the travel industry. So I want to give a quick plug for Disney Cruises. My family went on one with friends of ours a few weeks ago and it was fantastic. I highly recommend a Disney cruise if you're looking for a fun family getaway.

 

 

 

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Via Sara Bonert {Real Estate Internet Marketing} (Zillow):

This question came in from Karen Alterson a Realtor with Coldwell Banker Surf in Rockville Centre, NY.  As it is a pretty common question, I thought I'd answer it on my blog, so multiple people can benefit from the answer. 

Dear Zillow,

How do I get my name on the list of Realtors? And how do you get to the top???

Karen,

First of all, to get on the list, you simply have to create a free profile.  All profiles are included in the Directory.  To make sure you come up appropriately, make sure you completely fill out the fields like areas you specialize in and your marketing text.  In the upper right hand corner, you'll see the Register button.

Helpful videos:

How to activate your account

Creating a free profile

With regards to sort, helpfulness and contributions to the site are big factors in determining the order. 

Each listing and photo you add to the site are considered contributions.  Also, in case you don't have listings, answering questions in our advice section are contributions.  Also, once you contribute enough advice, you can be considered a Local Expert or All Star.  You can sign up to receive emails whenever there is a question in your area to answer. 

Helpful videos:

Zillow Advice overview

Becoming a Local Expert

Becoming an All Star

Hope that helps!

Sara

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And be sure to check out the Active Rain shout out 2:10 in -- "writes a blog for real estate professionals on ActiveRain"

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Tisza Major-Posner of the Route66 Living blog talks about why she likes Zillow. Taped at the NAR Convention in San Diego.

 

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Spencer Rascoff

Seattle, WA

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