The U.S. Open tennis tournament, which starts Monday, bills itself as the biggest annual sporting event in the world. It draws some 700,000 spectators. But where does it rank in terms of bucks?
When it comes to money, the U.S. Open serves a wallop. It's generates roughly $750 million for New York’s economy, according to the U.S. Tennis Association. That’s $200 million more than the Super Bowl. Of course, the tournament lasts two weeks and those numbers may be a little loose.
"They’re not being conservative," says Lisa Delpy Neirotti, a sports management professor at George Washington University. She says the U.S. Open counts not only tourists, who bring in new money, but also New York tennis fans, who might be spending anyway. "It's called expenditure switching," she says. "Instead of just going out to dinner, now maybe they’re going to the U.S. Open."
For one-time ad dollars, the Super Bowl wins, says Kenneth Shropshire of the Wharton School. But while Super Bowl ads hawk razors and fast food, the U.S. Open appeals to consumers with pricier tastes. "The Rolex, the Lexis. This is the demographic, you can reach them," he says.
They’re also more brand loyal. But, Shropshire says, naming the money champion is really a toss-up.
The NFL and one of its broadcast partners, ESPN, are getting some blowback after ESPN pulled out of an investigative project with Frontline on PBS about head injuries in the National Football League. The league denies pressuring ESPN in any way.
PBS made this announcement yesterday. ESPN responded:
Because ESPN is neither producing nor exercising editorial control over the Frontline documentaries, there will be no co-branding involving ESPN on the documentaries or their marketing materials. The use of ESPN's marks could incorrectly imply that we have editorial control. As we have in the past, we will continue to cover the concussion story through our own reporting.
The NFL has been known to be vigiliant in protecting its brand, says John Ourand, media reporter at Sports Business Journal.
"It's called The Shield. They love to protect The Shield," says Ourand. "In fact, that's one of the reasons they started their own network, the NFL Network. And what's ironic is that on the NFL Network, they do cover the concussion issue ... so they're not scared of this, they're not shy of this. That's what makes what happened so much more confusing."
The NFL is big business for ESPN, as well as other sports-broadcasting networks like FOX, CBS and NBC. ESPN alone pays the NFL $1 billion for Monday Night Football and highlight rights, and they just signed a deal for the next decade for close to $2 billion a year.
"Journalistically, this is a huge black eye for ESPN," Ourand adds. "I think it shows that ESPN bowed to some sort of pressure that was given by the NFL, and I think that's a real shame because ESPN has spent the past couple of years hiring some of the best sports journalists out there. They have taken people from the New York Times, some of the best newspapers, in order to get in there and cover these types of topics. What I'm going to be looking for is whether those people that came over find this untenable, because they're hirable people, and if they start to leave, then we'll know something's up."
But with business partners like the NFL, can ESPN hold on to its editorial integrity?
"That is literally the billion dollar question. I think they can," says Ourand. "I think that there's enough of a division between the business side of ESPN and the editorial side of ESPN. But the problem is, it's all called ESPN."
The next time you're in a CVS pharmacy and drug store, and you're buying a pack of gum, you might want to think twice when the clerk asks you if you want your receipt.
"You have this moment when you're standing at the counter where you're sort of like, 'Is it really this long?'," says Katie Manderfield, a contributor to Fast Company and senior editor at Group SJR that tracks digital trends. "And I think that's the moment that a lot of consumers have been documenting and capturing and uploading onto Twitter and Facebook."
If you haven't been to a CVS lately, you might not know how long these receipts can go. But the Internet has noticed and it's become a meme.
"My colleague Matt Mirandi actually just noticed that this meme was happening and that people were sort of hilariously documenting these really really long receipts," Manderfield says."And then of course once we found the requisite parody account, which is CVS_Receipt, we knew it was bound to become something big."
But, can CVS turn that free press mocking them into dollars at stores?
"We wanted to use it as a case study to see what was happening with this trend, and to see how CVS could really leverage the laughs," says Manderfield. "Especially with these sort of memes that happen organically, it's not necessarily something CVS would choose under their own volition ... but the good news at the end of the day is that people are talking about CVS."
But, the Internet has weighed in and those receipts still are pretty long. "They'll hold their receipt up to a 7-year-old or next to their huge german shepherd dog ... it's a little ridiculous."
Think you know TV show homes? Play our new brain game and match the famous home with its TV show. Play now.
Many of us still believe owning a home is the American Dream. Marketplace Money puts homeownership under the microscope. What should you know before you buy? What apps are out there to help you search for a home? And what is the skinny on short sales?
Plus, we developed a new brain game to test your housing pop culture knowledge. Homes have been featured in some of our favorite TV shows through the years. From Blanche's Miami home in "Golden Girls" to the "Full House" in San Francisco with DJ, Stephanie and Michelle Tanner. Your challenge is to match the famous TV home with its TV show.
And for any home buyers out there, check out our infographic of 10 mistakes you should avoid. Happy house hunting!
Nasdaq halted trading Thursday for about three hours due to a technical glitch. Things were fixed just before the market closed, and the day after no problems were reported.
"I think this is another instance that we see that the way we trade securities now has just become immensely complicated, and how in the last 10-15 years, new and better technology -- along with all these participants finding new ways to get around regulations -- have found ways to make things really complicated to make a little more money," said FT Alphaville's Cardiff Garcia. "The immediate effect of what happened yesterday was something akin to everybody taking a long lunch and then catching up on their work later. But it is troublesome that these kinds of things just seem to keep happening, and there's got to be a way to make these systems more robust."
"I mean, it's going to happen again," said The Guardian's Heidi Moore. The CEO of Nasdaq "gave an interview and he considered himself happy if they could get above 99 percent reliability in doing these. Imagine that -- he's just conceding -- 'you cannot get 100 percent.' And he's right."
And we've got our Weekly Wrap #longreads suggestions.
Heidi Moore recommends:
- As we talk more and more about the surveillance state, this week The Guardian has questioned not just the scope of the intelligence collected on Americans, but also its accuracy. A great example is mild-mannered author William Vollmann, who sued for his FBI file and found that the leading lights of intelligence once suspected him of being...the Unabomber.
- A great New York Review of Books analysis of musician Questlove, a "hip-hop evolutionist."
- The bastardization of the French baguette into something doughier and less crusty is a metaphor for humanity itself: it speaks to national identity, changing tastes in food, and the be-blanding of globalization.
Cardiff Garcia suggests:
You've made it. You are settled in life. You are on the path for financial security. Homeownership means more than just a picket fence or a two-car garage. It's emotional and personal. Even with the clouds that hung over the housing market the last few years, it was hard to get away from this idea -- that buying a place is part of the American Dream. It's certainly a part of the economic recovery. We still pay close attention to home sales, prices, inventory.
The National Association of Realtors says existing home sales topped an almost four-year high in July. So what do you need to ask yourself before you enter the market? We're getting some advice from Alison Rogers, a real estate agent and a columnist for Time.com.
What is the right moment to get in?
"Sometimes people have a desire to own a house. You have to remember that purchase of your single-family home isn't an investment, it's a consumption. I would certainly recommend that people have saved up a 10 percent down payment and feel that they're going to stay in the house for at least five years," says Rogers.
Rogers says first-time home buyers are always surprised to find out how expensive it is to own a piece of property.
"When you're considering purchasing, ask the current homeowner for his or her utility bills, his or her property tax bills, and also factor in the idea that you'll probably be making one major repair a year. I would just add in maybe 2-3 percent of the house's purchase price in my head as annual maintenance," says Rogers. "For maintenance, for example, if you're buying a $400,000 house, I would think of wanting to have $8,000 in annual maintenance costs. That sounds like a lot, but if you're replacing a roof or have boiler problems, it starts to add up."
Nowadays, people are looking at mortgage rates, which have been low for the past few years, but are now starting to creep up. Rogers says the rates are still historically very low.
"We've seen a bounce from 3.5 percent to 4.5 percent, which is very scary if you're thinking of buying. But historically anything below 6 percent is still a very low mortgage rate. I wouldn't use the rising rates as a reason to be too hasty in my decision [to buy]," says Rogers. "I wouldn't panic and I wouldn't make a decision you're going to regret based on just seeing those numbers move around."
Rogers says people shouldn't think of a home as a way of building wealth. She says building wealth is a wonderful extra of buying a home and is a worthy purchase you should save up to make, but you shouldn't expect price appreciation.
"The price appreciation that we got in this country in the '90s and the '00s really was whipped cream on top of the sundae. It wasn't something you should have expected and you shouldn't necessarily expect it to repeat," says Rogers.
Could it possibly be true that watching videos on my smartphone uses as much electricity as two refrigerators?
“This is an example of a claim that sounds interesting, but really has no basis in fact,” says Jonathan Koomey, a research fellow at the Steyer-Taylor Center for Energy Policy and Finance at Stanford University.
Koomey has devoted years of his professional career to fighting this refrigerator analogy. It first came up more than a decade ago, by the same author, then making the claim that a Palm Pilot used the same electricity as a fridge.
Koomey says fighting it again now is pretty frustrating, “I’d rather not have to spend time rehashing this stuff.” But, the claim is back. So Koomey is back; figuring out just how much electricity goes into making and using my smartphone.
By his calculation, it’s about 60 kilowatt-hours.
Mark Mills, a senior fellow at the Manhattan Institute, and the author of the phone-equals-refrigerator claim, estimates it’s closer to 700 kilowatt-hours.
Mills is author of a report called The Cloud Begins with Coal, sponsored by the mining and coal industries. He says he wants to get people thinking about how much electricity these devices use. And he doesn’t think the controversy around the refrigerator analogy distracts people from his bigger point.
“The debate makes it an interesting conversation, like we’re having,” says Mills.
He stands by his calculations and his main assertion: “It is accurate: it uses a lot of electricity. Now if someone were to say, it’s not equal to a refrigerator or equals half a refrigerator or a tenth of a refrigerator, that’s still a big number.”
Why use this analogy again? Why compare a phone to a fridge, when Mills got so blasted the first time?
“If I came up to you and remarked to you that there is a one-headed cat around the corner from your house you would be totally uninterested,” says Bruce Nordman, a research scientist at Lawrence Berkeley National Laboratory*, “but if I said there was a three-headed cat you’d be amazed that it exists and want to go see it; so these fantastical assertions naturally attract people’s attention, whether or not they are real.”
Nordham says the idea that our phones use as much energy as a fridge is basically that three-headed cat; it’s not real. And still, these things get picked up, and passed around.
Which raises another question -- why?
“Thinking about a smartphone, a tiny small device, that sits in our pocket using the same amount of energy as a huge refrigerator, seems so amazing that we just have to share us with someone else,” says Jonah Berger, a marketing professor at the Wharton school and author of "Contagious: Why Things Catch On." “It’s a neat little factoid that makes us look smart, even if in this case, it’s not actually true.”
He says the controversy around it helps makes it sticky and it taps into a broader conversation about the environment. “If everyone is talking about the environment, they are looking for something to add to that conversation,” Berger says. “We all know that gas prices are up, what's there to say that’s new? But if I can plug in a new fact to that conversation, it’s going to get talked about a lot.”
Even if that fact isn’t factual.
Here's something to remember: When most of us buy a home, we're essentially getting help from the government in the form of Fannie Mae and Freddie Mac. They are two government-backed companies that subsidize and underwrite mortgages -- including one that is the bedrock of the real estate market, the 30-year fixed rate. That loan makes up a large part of the U.S mortgage market.
So when we talk about homeownership, we are essentially talking about the 30-year. Because most consumers have used this mortgage to get a home. Right now, Congress is trying to figure out whether it should still exist. Will it go away? Ilyce Glink, a personal finance expert and author, says she can't imagine that ever happening.
"I know that there's been talk about eliminating it, and truth be told, most Americans don't keep their mortgages for 30 years. The typical American household will keep a mortgage for usually somewhere between 5-7 years. But now that mortgage interest rates are near historic lows -- they're not quite at the historic low, but very close to it -- I think we're going to see these mortgages kept for a long time," says Glink.
The government is trying to wind down Fannie Mae and Freddie Mac, which could really change the mortgage picture out there because most of the new mortgages that have been taken out the last few years have been backed by the two government-backed companies. What could mortgages look like if Fannie and Freddie go private or have a diminished role?
"In its place is going to be a system that I think will look very much like Fannie Mae and Freddie Mac except going to be not Fannie Mae and Freddie Mac. What will end up happening is that private entities [will] step in and perform this secondary mortgage market function and it'll probably names that you name like Bank of America or Chase. The big banks are going to want a part of this," says Glink.
If you're thinking of buying a house and trying to figure out the financing end of it, what should you expect?
"I think what you'll see with whatever replaces Fannie Mae and Freddie Mac are additional charges and fees that are going to go into this. Ultimately that will fall to the buyers. So I think buyers will see mortgages that are going to be more expensive," says Glink. "The costs of mortgages is going to go up. We see interest rates already going up, that's making mortgages more expensive. And I think the fees associated with it are going to go up."
Glink says the super low interest rates we've seen the last few years are a direct result of the economy tanking, and the Federal Reserve buying mortgage-backed securities and other instruments to keep rates low. She says eventually the economy will improve and costs will go up.
In 5-10 years, what might the standard mortgage look like?
"I don't know that there's any way to know right now. But looking out 10 years, if I had to lay odds on it, I would say there will still be a 30-year mortgage. People will still be able to qualify, but they're going to have to qualify based on what they actually earn and can afford to repay," says Glink. "We went through a period where all you needed was a pulse and a good credit score and you could leverage up your income by 10 times. I think those days are gone."
There were no show-stopping glitches in the stock market Friday. But everyone from day-traders to Securities and Exchange Commission officials were still scratching their heads about Thursday’s “flash freeze” on the Nasdaq Stock Exchange.
One puzzled expert was Michael Goldstein, chairman of the finance department at Babson College. “Why didn’t Nasdaq have a back-up?” he asked.
In many cases, it does. The U.S. has 13 stock exchanges. If one goes down, investors can go through the others. That is, only if they know the stock prices, and what failed Thursday was the system that tells everyone Nasdaq share prices.
“It’s kind of ridiculous,” says Joseph Saluzzi, co-founder of brokerage firm Themis Trading. “It’s a Rube Goldberg machine. Here we call it a fragment maze of destinations.”
The complexity of the exchange system makes it vulnerable, Saluzzi says, and as for a back-up, “As far as we know, that does not exist.”
Nasdaq CEO Robert Greifeld said Friday he agrees that U.S. markets should have a system that backs up stock quotes for all exchanges.
Part of the problem, says Eric Hunsader, founder of market data provider Nanex, is that exchanges haven’t had the incentive to focus on back-up systems for price-sharing programs. That’s because the most lucrative traders don’t need them. They’re so big they have their own.
“Exchanges cater to the high-frequency traders,” he says.
Nasdaq did not respond to a request for comment.
Investors and others are concerned that a single point of failure could close Nasdaq for three hours.
“This is a chokepoint, so you’d thing the chokepoint should have all the redundancy in the world,” says Charles Jones, a Columbia finance professor. Still, he says, no matter how much stock exchanges invest, “I don’t think we’ll ever get to 100 percent reliability.”
The cape hand-off has happened. Ben Affleck will be the next Batman. He'll team up with Superman for the sequel of "Man of Steel." The choice of Affleck sparked a backlash by comic book nerds on the Internet.
“There has been a lot of backlash online. There are a couple petitions to remove Affleck from the film on Change.org,” says Rachel Abrams, who covers the movie biz for Variety. The news got a better reaction from the people who follow the money in Hollywood.
“Good for Warner Brothers for getting Ben Affleck to be a superhero. Because Ben Affleck had said that he’s never going to do it again after he had a horrible experience playing a blind superhero in 'Daredevil,'” says Sharon Waxman, editor-in-chief at The Wrap.com.
As you may recall, there was no "Daredevil" sequel. Did Ben Affleck kill the chances for a "Daredevil" franchise?
“The proof is in the pudding. There hasn’t been a 'Daredevil' franchise. So that’s probably fair to say,” says Waxman.
The buzz in Hollywood is that the Batman deal was less about Affleck chasing a paycheck, and more to do with his relationship with Warner Brothers. The studio backed some of his smaller films, like "Argo," which won an Oscar for Best Picture.
“Ben Affleck now is kind of repaying the studio in some way for that vote of confidence,” says Waxman.
But Rachel Abrams disagrees. “I think he’s going to make a lot of money off this movie. I don’t think he’s doing anyone any favors,” says Abrams.
No word yet on how much Affleck will be paid. But Christian Bale reportedly turned down $50 million to put the cape back on.
Many successful superhero movies have relied on virtually unknown actors. But star power can help the film stand out. Waxman says, “There’s a lot more competition now for superhero movies, because all the major studios are doing that as sort of single diet in the summertime.”
It is possible for a Batman movie to disappoint at the box office. Remember George Clooney is "Batman and Robin"? Keith Simanton is managing editor at the Internet Movie Database, or IMDB. Speaking of "Batman and Robin," Simanton says, “Domestically, it didn’t make back its budget."
Even if Affleck is a monumental flop, don’t expect him to kill the franchise. In the last 25 years, globally, the Batman movies have made almost $4 billion.
Microsoft Corporation now hiring
Position: Chief executive officer
Microsoft was founded in 1975 by Bill Gates and Paul Allen. Today we are the world’s largest multinational software company.
Our mission and values are to help people and businesses throughout the world realize their full potential. We are based in Redmond, Wash.
We are currently looking for a self-motivated, innovative leader who can help us expand our reach as a software maker and generate successful new product lines.
If hired, you will replace current CEO Steve Ballmer, who will retire within the next 12 months.
- Candidate must be able to focus on customer and employee satisfaction while simultaneously satisfying shareholder demands.
- Must be able to make Microsoft likeable (see Google and Apple, e.g.).
- Experience in product development a must.
- Previous role in a leadership position at a Top 10 tech company preferable.
- Baldness a plus (see Jeff Bezos and Steve Jobs, e.g.).
- Extensive knowledge of mobile hardware and operating systems required.
- Must have reliable transportation.
For more Americans, the process of buying a home starts with their phone. There are apps galore for those on the house hunt. So, how do you decide which software will really help you in your search? Katie Roof, a business and technology journalist in New York, has test driven some of these real estate apps, and says the process of finding a home has gotten easier these days because of these apps.
"There's a lot of apps in the app store. You have the big ones like Zillow and Trulia. They each have four different apps that you can choose from. Some of them are for home buying. Some of them are for renting. You can use your location and it will help find listings near you. Then you can set your criteria," says Roof. "You can help find listings in your area that are suitable for you."
For example, you can look for houses near a certain school district or located within a specific zip code.
"A website out there that's good for that is BlockAvenue, which shows information about schools and crime and different neighborhood data that you might find interesting. Trulia and Zillow also have more detailed information on that on their websites. And some of them, like Lovely, will alert you. Once you've stored your preferences in there it will tell you when a home becomes available that meets your search criteria," says Roof. "Then there are others like Home Snap, where you can take a picture of a home that you see out there already and it will show you information about that home."
Homesnap has been called a Shazam for homes, and there's also a social component where you can get input from your friends on what they think of certain homes.
The best real estate apps out there right now, according to Roof:
Roof says her favorite app is Trulia because it has the best design and is pretty comprehensive nationally. Trulia also has another app, a mortgage calculator, which Roof likes. Zillow and Bankrate also have similar apps. Roof recommends taking a look at one of these mortgage calculator apps even before you begin house hunting.
"Even before you're looking actually, it could be good to take a look at these apps and say 'How much can I afford right now? This is how much I make. This is my credit score. This is the area I'm looking at, so what are the property taxes?' It will help you figure all of that out quickly and then it will help you find people that will help you find a loan at that rate," says Roof.
As for renters, Roof says Trulia and Zillow both have a separate app for people looking for rental listings.
Trader Joe's is suing a small business owner for reselling its products in Canada. The popular grocer doesn't operate in Canada, which is a business opportunity for Mike Hallatt, who runs a Vancouver shop called Pirate Joe's.
As President Obama pressures colleges to limit tuition increases, could colleges with wealthy endowments use some of that money to offset the rising cost of higher education?
Pull up a chart of the Nasdaq on Thursday and you see something crazy: a flat line for hours. Nasdaq halted all trading because of a technical glitch. Things were fixed just before the market close, but many are still looking for answers.
Home ownership can be a way for low-income folks to punch a ticket to upward mobility. However, many experts recommend that low-income people build wealth in other ways before they take on a mortgage.
“You have to be financially ready," advises Ray Boshara, director of the Center for Household Financial Responsibility at the Federal Reserve Bank of St. Louis. He suggests that before people dive into the housing market, low-income folks ask themselves a few questions, like: "Do you have sufficient savings? Are your debts at a manageable level? Are your assets somewhat diversified? "
Boshara underscores that final point: "You want to make sure you don’t have all your assets in housing." That's a lesson from the recession. People who had most of their money tied up in home ownership, he says, are the ones who lost more of their wealth during the downturn. For younger families (those under 40), 75 percent of the wealth lost during the recession is because of home ownership. Boshara says many of them got caught up in the housing bubble, and bought a home before they were financially prepared.
Where does buying a home rank in asset building for low-income families?
Boshara says people with modest incomes should take other steps before they buy a home.
“You want to make sure you have savings. You want to make sure your debts are at a manageable level. You want to make sure your credit score is good. And if possible save for your kid’s college,” says Boshara.
He says diversifying your assets and keeping your debt low can put you in a better position to buy a home.
Is a home a way to build wealth or is it just a place to live?
History shows us that if your goal is to make money, then home ownership is not the best route, according to Boshara. He points to data that shows the performance of different asset classes since 1983.
- Financial assets and stocks returned 7 percent
- Pensions returned at 4 percent
- Business assets returned at 2 percent
- Homes returned at 1.6 percent
Although home ownership may not be a big money maker, Boshara says if you hold onto that asset (a home) over time, it will build equity and you may be able to use it to finance your children's education, a business startup or retirement savings.
We're talking about home ownership this week. What does it mean? Is it right choice for you? Buying a house is a complicated process that brings up a lot of questions. So today, we've invited Louis Barajas, a personal finance expert in L.A., to answer some of those questions from our listeners.
A number of our friends on Facebook wrote to us with questions about short sales. Joe, a first-time homebuyer in Washington, D.C., asked about bidding on a short sale condo back in February. He's worried, not only because the sale has taken so long, but also because he's heard rumors that at the last second, the price can go up. So what is a short sale and is it a good way to get into the housing market?
"Technically, a short sale is when someone owns a home and they're underwater. Meaning that if they were to sell their house, they would get more debt than they would get from the proceeds of the home. So, now they're trying to get rid of their house -- they maybe have lost their job and they're handing it back to the bank. The wonderful thing is that in the year 2013, this is the last year that we'll be able to do this, is that any debt that you will have to incur from getting rid of the house or selling the house, you will not be liable for it. You won't have to pay the taxes on it. Because usually with this thing called debt forgiveness, if they forgive a certain amount of debt you have to report that difference on your tax return and pay taxes on that amount. Until the end of this year, you have that on a primary residence. So everybody's trying to hurry up and get their short sales done as quickly as possible right now," says Barajas.
As for Joe's worry that the price will go up at the last minute, Barajas says when you bid on a home that's a short sale, a few things need to happen first -- and that it's a lengthy process. The short sale has to get approved by the bank. Secondly, if there are other liens on the property, the lien holders have to approve it. If there's a condo or homeowner's association, they have to approve. At the same there, there also has to be an appraisal and then the broker who's putting a bid in on the property has to do an appraisal, too. All told, Barajas says the process takes 3-6 months and that Joe needs to hold tight.
Because interest rates are going up and property values are going up, Barajas says the bank may want to hold off on accepting Joe's offer, to see if someone comes in with a higher offer.
Barajas also answered these listener questions:
- Jen and her husband live in San Francisco and have been looking for a townhome. She wants to know how to use the VA mortgage benefit to help her find a home.
- Steve from Arizona is renting right now ,but is thinking about getting into the housing market. He wants to know whether this is the right time to get into the market.
- Leslie from Portland, Ore., wants to refinance her home, but is worreid about qualifying because of her income. What can she do?
Click play on the audio player above to hear the advice. Plus, whether you're buying for the first time or have been around the block, check out our infographic on 10 home buying mistakes you should avoid.
Microsoft announced Friday that its CEO, Steve Ballmer, will retire within the year. Ballmer has led the company at a difficult time for the tech giant, which has struggled to transition its products out of the PC era.
Marketplace Tech reporter Queena Kim joins Tech host Ben Johnson with a look back on Ballmer's tenure. Click on the audio player above to hear more.
This final note today, in which we mark the departure of Steve Ballmer from Microsoft.
He's known for his intensity, shall we say. His enthusiasm for the cause. He likes to rally the troops:
But you know, a CEO's gotta do what a CEO's gotta do to get his team excited, right?
Four bedrooms. A walk-through closet. A fully decked-out bathroom. Phenomenal views.
These were some of the descriptive phrases used to advertise a home currently on the market in Eagle Rock, Calif. The Los Angeles neighborhood is desirable for families and entertainment industry types looking to nest in a relatively peaceful part of town. The home we visited is listed at $849,000 and that's where we met realtor Tracy King of Teles Properties on Thursday.
"We came on the market on Sunday and we have three offers in hand," says King.
That's typical in today's housing market, which is filled with stiff competition for house hunters. Finding the perfect abode takes persistence, patience... and sometimes, paper.
"We're seeing mostly 20% percent down to 30-40 percent down, but in the last couple of years, an amazing number of the houses that I've sold have been for cash in all price ranges," says King.
That includes a home she sold in the spring for $920,000 in cash. That home, located in Los Angeles' Highland Park neighborhood, was listed for $799,000. That's right -- more consumers are successfully scooping up homes by paying well over the asking price.
King says to get what they want, home buyers need to come prepared.
"In today's market, you'd better be ready with your pre-approval, your credit reports, your proof of funds and the ones who really do well now are the ones who have actual underwriting approval. So, they're not pre-approved, they're actually approved," King says. "All they have to do is identify the property and get the appraisal done."
King has been selling real estate for more than two decades. She says she’s amused by potential buyers who pretend they're not really interested in a property. But they profess their true feelings once they make an offer. Often, people will write what King calls "love letters" to her, in hopes of influencing which offer will be selected by the seller.
"Buyers today will do photos, photos with the kids, with the dog, lovely letters -- this is who we are, this is why we love your house, this is what we want to do when we get here, this is how we see ourselves living here. Nice letters," says King. "I'm a little bit cynical. I think that same letter has probably been used on many properties until they actually get one but, it's a grueling process and they'll think they're going to get a house at whatever price they started at -- say $600,000 -- and they're thinking they'll look in the $600,000 range and they'll try and they'll lose out. And they'll lose out again. Some people we talk to have made 20 offers and then they'll get to the point when they're like 'This is it. We're not going to go through this process anymore. Let's just kill it,' and they'll offer as much as they possibly can and they get the house.”King says that, these days, well-priced properties are only on the market for an average of two weeks and it's common to have several offers after only a matter of days.
How have you found the experience of shopping for a home? Challenging or not as difficult as King described? Share your story about home buying with us by leaving a comment below.
Pull up a chart of the Nasdaq on Thursday and you see something crazy: a flat line for hours. Nasdaq halted all trading because of a technical glitch. Things were fixed just before the market close, but many are still looking for answers.
Chris Low, chief economist at FTN Financial, joins Marketplace's Mark Garrison to discuss why glitches like this are bound to keep happening.
Audio Extra: David Weild, former Nasdaq chairman, discusses Thursday's trading glitch and market complexity.
Trader Joe's is suing a small business owner for reselling its products in Canada. The popular grocer doesn't operate in Canada, which is a business opportunity for Mike Hallatt, who runs a Vancouver shop called Pirate Joe's. Hallatt says he's spent hundreds of thousands of dollars shopping at Trader Joe's in America. He then marks up their products and resells them. Trader Joe's wants that to stop.
Hallatt joins Marketplace's Mark Garrison to discuss. Click on the audio player above to hear more.