New 2013 Continuing Ed for Realtors:
“Contracts and Minnesota Distressed Properties”

Investing types know that the one of the keys to divining markets is determining market psychology — then acting against it.

Call it, “Contrarian Principle #1.”

Noise vs. Signal

Given Principle #1, it’s no surprise that figuring out exactly which signals reflect consensus sentiment is something of a national pastime.

shade treeWhich gives rise to Contrarian Principle #2:   something which is wrong 100% of the time (or close) is just as valuable as something that is always right.

How’s that?

You just do the opposite.

In statistics-speak, a coefficient of correlation of -“1” is just as useful as a coefficient of correlation of “+1.”

Lagging Indicators

With all that as prelude, my take on the new course, “Contracts and Minnesota Distressed Properties”  — required of Minnesota Realtors for the first time this year — is that it is best understood as a sign that the housing market is genuinely recovering.

Why’s that?

Because distressed sales have been a feature of the Twin Cities market — and every other market nationally — since at least 2008.

The Realtors who specialize in these transactions learned what they needed to know years ago — and the rest are less likely to handle them, as distress sales continue to recede.

curveIt’s also the case that market-leading brokers like Edina Realty tackled this subject internally, through their own training and (multiple) office meetings, way back when.

So, the fact that the new course is now required state-wide in 2013 strikes me as, shall we say, a little bit “behind the curve.”

In fact, it’s just the kind of thing you’d expect as the market is recovering . . .

See also, “Contrarian Indicator”; “Contrarian Indicators — Housing Market Edition”; “Successor to ‘The Magazine Cover Indicator’:  The WSJ Diss.”

P.S.:  one of my favorite market metaphors is big trees and rainstorms.

While it’s raining, the driest place to be is under a big tree.

Afterwards, once the sun’s out, it’s one of the wettest (because of all the water dripping off the leaves).

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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