Jim Bednar | The renter who blogs on real estate

The Star-Ledger, November 2nd, 2006

The Star-Ledger Archive COPYRIGHT © The Star-Ledger 2006

Date: 2006/11/02 Thursday Page: 043 Section: BUSINESS Edition: FINAL Size: 1608 words

My Turn: A conversation about life and work

By SAM ALI STAR-LEDGER STAFF

Faithful readers of the New Jersey Real Estate Report blog know its author James Bednar by his online pseudonym, “Grim.”

It’s a nickname the 30-year-old software architect picked up back in the 1980s when the Garbage Pail Kids – a gruesome gallery of children’s bubble-gum cards spoofing the Cabbage Patch Kids – were at the height of their popularity.

Someone – he can’t remember who – gave him the “Grim Jim” card one day, a funny caricature of the Grim Reaper, and the name just stuck. But today, “Grim” just about sums up how Bednar feels about the New Jersey real estate market.

Bednar recently talked to Star-Ledger business writer Sam Ali about the housing market, why he created his blog and the challenges of growing stony coral in his basement.

"MY WHOLE INTEREST IN in real estate came after I got married and we started doing the same thing every other newly married couple does. We were renting an apartment and we would go out and try to look for a place, and it was intimidating. This was in early 2005, during the frenzy of the bidding wars. We made a bid on two properties and, of course, we were outbid on both and it was just silly. One of the houses was in Montclair. It was listed for $499,000. Great price, right? But, of course, it closed for $700,000. It was incredible. And at that point, it was like: “This has gone too far. The market has just lost its mind.”

"WE'RE STILL RENTERS. Comfortable renters, and we’re not looking to jump into anything yet. We have a dog. A white boxer. We have a fish tank. I don’t feel like I’m missing out on anything, but at the same time, you flip through the television and you see “This Old House,” and you know, Norm is standing there swinging his hammer and it’s like, “Well, wouldn’t that be kinda nice?”

"I HAVE ALWAYS WORKED very hard to be the best I can be at anything and everything I do. I’ve always saved. I was not a frivolous person. I didn’t waste my money. I never had any credit card debt. I worked full time through college to pay for college because I didn’t want the debt and it gets frustrating because you get to this point where you say: “I’ve done everything right. I’ve got my down payment, my 20 percent. Show me what I can afford or what I can pay for given my salary,” and it’s like, “Gee, I worked so hard for this?” It’s a bit disheartening."

"I'M A FIRM BELIEVER we are going to see a hard landing in real estate, especially in New Jersey, given the economic fundamentals, high property taxes, the loss of jobs. Real estate always comes back to the fundamentals. What can wages in an area support? What can the jobs in an area support? What do the rents look like? I think we are going to continue to see more people leaving New Jersey. Our best friends just left. They moved to San Antonio. We worked together for five years and he decided, “This is silly; there is nothing for us left here in New Jersey.” They wanted to get on with their life. They didn’t want to wait out the market, so they picked up and left and moved to San Antonio and they’re in this 3,500-square-foot mansion, which they paid almost nothing for in northern New Jersey terms, and they’re happy."

"I STARTED MY CAREER working through the Nasdaq dot-com bubble. My software company was a dot-com through the late-1990s, and we were right in the middle of the e-commerce craze. The parallels with the dot-com bubble were just too similar to me. I remember hanging out at barbecues and everyone passing around stock picks like they were Warren Buffett. And then, all of a sudden, the same thing happened with real estate. All of a sudden, everyone is a real estate investor. Everybody is a flipper. You’ve got whole television networks dedicated to people making their fortunes in real estate. Fundamentally, something felt very wrong with the market to me. So at that point, I made it my mission to learn everything real estate.''

I have always been more of a quantifier than a qualifier, so I wanted to see hard data. I wanted to know housing inventory levels. I wanted to see how many homes were for sale. And it wasn’t until then that I realized how difficult it was to get this stuff. It’s so guarded. The New Jersey Association of Realtors only releases their data quarterly, and often, two months after the quarter has already ended. It was frustrating. All this information is sort of locked up within the real estate industry. By the time the data gets out to the tax records system, it is already so stale that it’s very difficult for someone not on the inside to get a good feel for what the market is doing. We’re always looking back, looking back, looking back.

When I was digging for information, I actually came across a few people, a few real estate agents, gems, that were very, very helpful and these people started providing me with information I needed. I’d say, can I see a list of all the sales for last month and they would give me the data. Or, what were the price reductions in this town for this month? And they would give me all the data. And once I started to go through all the data and work my own statistics and monitor inventories on a timelier basis, it came to the point where I wanted other people to see what I was seeing and I said, “I have to start a blog.”

If I’m going to do something, I really just put everything in to it. My best man at my wedding even joked about it that whenever Jim gets into something, you can expect that he is just going to go over the top. Always. Everything I do ends up, I don’t want to say obsessive, but the more I think about it, the more it sounds like I am being obsessive.

I got into salt-water fish a while back. It was more complicated than fresh-water fish, but hey, that was right up my alley. And within a week, I didn’t care about the salt-water fish. I wanted to raise coral, because that was so much more complicated. You’ve got two basic forms of coral – your stony coral, your reef building coral, and you have soft corals. Have you seen an anemone? That’s a soft coral. Soft corals are easy. They are difficult to kill, so immediately I was not interested in that. I wanted to go right into the stony coral, the ones that grow around Fiji and Tonga and all around the Pacific Rim and are very difficult to ship and to grow. If I grow a piece the size of my pinky finger, I can sell it for 100 bucks because it’s so rare. The point is, it was a very complicated hobby and I loved it. I went from the little fish tank to the 70-gallon fish tank, to the 180-gallon fish tank with the equipment spilling out the sides and chemistry meters and monitors running. I even integrated the computer into that so I could constantly watch and monitor my fish tank from wherever I was.

I probably spend three to four hours a day immersed in blogging, whether it’s doing research or just keeping an eye on Bloomberg and all the newsfeeds and all the economic reports. I try to get every piece of information onto my blog as quick as possible. The great thing about a blog it is almost a real-time thing. The GDP number comes out in the morning and I have to type away and get something up on the GDP because people want to talk about it.

I blog everywhere. I have my laptop always with me. Always. And I’ve got all sorts of gadgets that let me find a network connection that I can piggyback onto so I can blog. I know that is bad. You’re not supposed to piggyback onto other people’s unsecured wireless networks, but I’ll drive around until I find one. I sit outside open houses and blog. I always sneak around to open houses and sign fake names and try to dig for information or try to make a new contact.

My wife doesn’t like the blog. My wife says I spend too much time on the blog. I wake up and I look forward to the GDP numbers. But she puts up with it. I blog on vacation. You know, we’re in Mexico, and I wake up at 4 a.m. to run down to the Internet center just to get the morning stories up. I blog from airports. I blog from Starbucks. I’ve blogged from everywhere. Long Beach Island, on the beach, you name it. I’ve blogged from Europe. I’ve blogged from Poland. The readers have come to expect real-time news. I do feel obligated to the readers.

I have to admit, I am a touch on the activist side. I want to shake things up. I want to see change in the real estate industry. I want to see clarity. I want to see openness. I want to see the Realtor cartel broken up. As outspoken as I am on the blog, so is everyone else and I know I have made a lot of people angry. I get tons and tons of hate mail from Realtors. I have been single-handedly blamed for the state of the New Jersey housing market.

Most large blogs generate revenue by running ads. I experimented with ads very early on. I made about 30 or 40 cents. Literally. Then I decided I didn’t want the advertising because I thought it would detract from my credibility. Someone would be able to say, look, you are just trying to start trouble because you know people will come here and when you get a lot of visitors and they click on some linked ads, you’re going to make money. So right now, my blog is not for profit.

I have always believed that this sense of community online is something powerful. You can get it to a point where it will take off on its own. It will become its own living, breathing community and when I had started the blog, I had hoped that thing would develop and the blog is getting to that point and that is part of the success of the blog. Not just the work I put into it, but the community that is there behind it.

Sam Ali may be reached at sali@starledger.com or at (973) 392-4188.

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