Thursday, May 19, 2011

Publishing and the Real Estate Market

Everyone knows that the real estate market is a mess. The collapse of the real estate market has been, in many ways, the central issue in the economic crisis in the USA. Banks are now involved as the seller in 50% of all housing transactions. Especially in the lower end of the housing market. That number may still be growing. The problem with the bank being involved as the seller is that the bank doesn't care about anyone other than itself, and, since it's not a person, it cares for nothing more than getting the most money it can at the expense of anyone else involved.

Anyone paying attention to it knows that the publishing industry is a mess. Its infrastructure is collapsing due to technological changes and the growing demand by authors to have more control over their work (When someone like Dan Brown switches from a major publisher to a POD (print on demand) model, it's about control). The publishing industry, so far, refuses to change. It continues to cling to the way it's always done things, and, since it's not a person, it cares for nothing more than getting  the most money it can at the expense of anyone else involved.

My wife and I have been trying to buy a house for a number of months, and this is the thought that occurred to me this morning (This is only a thought, a parallel; there is no real point beyond this. I just found it interesting.): the real estate market and publishing are a lot alike, at the moment. In our price range, virtually all of the houses are bank owned or soon-to-be bank owned (short sales (that's when the owner needs to sell the house for less than what they owe on it (usually because they're going into foreclosure))), so we've been dealing with banks more than we've wanted to.

We had an offer accepted on a house a few weeks ago. It's a short sale, so there's a lot that has to happen between the bank (the actual owner (because banks do actually own most everyone's homes)) and the seller (the person (family) living in the house) before anything actually happens with  that. The problem is this: one of the inspections shows extensive dry rot in the siding on the house. It may have affected the structure of the house, but they don't know, because they'd have to remove the siding to find out. Will they do that? No. And why not? The current price is a fair price if the structure is intact; however, it's much too high if there's structural damage to the house. Does the bank want to have to lower the price? No. Does the bank care about anything beyond how much they can get? No. It's better for them not to know about structural damage. At some point, someone will come along and either not know to check that stuff or not care about it.

We've run into this problem over and over again looking at houses. Bank owned properties come as they are. Period. In short, they don't care about the actual product they're selling as long as someone buys it. As an aside, the thing I'm finding morbidly amusing is the investors that are buying these houses from the banks, fixing them up, and, then, finding, because the housing market is still in a decline, that they can't sell them for more than they paid for them even after pouring in thousands of dollars to fix them. Sometimes, they have to sell them for less. The publishing industry mirrors this lack of care for their products. They do this by what I'll call marketing genres. Vampires are popular, right now, so, they say to their agents, find us some people writing about vampires. No, we don't care if they're any good, vampires sell. Until everyone gets tired of vampires because of all the crappy vampire books that are coming out. But they'll just move onto whatever replaces vampires.

Then there are the agents. We like our real estate agent as a person. We often have doubts about her as a real estate agent. She keeps wanting us to buy the house she wants us to buy. Insisting that we should look at houses that don't fit the parameters of what we're looking for. And she's always pushing us toward buying at the high end of what we've been approved for instead of the range we keep saying we want to purchase within. And why not? The more we spend on a house, the more she makes. We understand her motivation, and we try to work around it as best we can, especially knowing that that is what we will have to deal with no matter what agent we have.

Likewise, literary agents are, also, interested in their paychecks. It's understandable. However, when you're working for an organization that's collapsing, it can make you kind of desperate. Oh, and if you think agents work for the authors, you really need to look, again, at the structure of the industry. The money stream is from the publisher, to the agent, then, finally, to the author. If it wasn't that way, there would not be various scandals in recent years about agents syphoning money away from their authors to themselves. At any rate, agents are clinging more and more tightly to the publishers and the publishers demands rather than working for the author and/or looking for new things. Publishers don't want new things; they want what's already proving to sell.

I know these parallels aren't exact, but, when I have a bank that wants to unload a house on me that may have structural issues, I'm reminded of some of the books I've read. Here's the thing, though, what's good for me is not what's good for someone else. Most people don't have the standards I do for books, and that's fine for them. Just like, I'm assuming, most people don't have the standards my wife and I do for a house. After all, the house with the special pot lab in the garage sold soon after we looked at it. Different people have different needs. And, well, if the buyer was planning to set up a pot lab, he was getting just what he needed. Cheap!

There is a positive, though, at least on the publishing side: there are alternatives. And, maybe, the publishing industry will evolve itself to meet the changes that are occurring in society (although, I don't really believe that). Authors do have other avenues they can use rather than trying to get on board a leaking ship. Unfortunately, in home buying, there aren't a lot of alternatives.


  1. Very interesting post, especially since we've been trying to save up for a house down payment for the last three years. At this point, we're renting and might do that for the next five years (we plan to move back East when the older kids are in college) just to avoid getting stuck in a house that we can't resell.

    Publishing is tough right now too, that's for sure, and you made some disturbingly good comparisons. Thanks for a thought-provoking post!

  2. You're right, the banks really don't care. There's a house down the street from me that's up for auction, and for the last month has had a splintered, fallen tree leaning against the side of it. Not their problem, right?

    We bought at the peak of the market in 2005 and will never make our money back if we try to sell, even after all the work we put into it. Which led me to this post, about how manuscripts and house renovations are alike. You're not alone!

  3. Great parallel! Oh, it's so frustrating. I heard back on a partial recently and the agent gave me some really nice compliments about my story and writing but had to "step aside" bc they were afraid they couldn't sell it :(

    Such is the industry, and like you said, I'm so glad there are alternatives these days. Not so with purchasing a home, unfortunately.

  4. The whole agent thing does have me in a tizzy. I've been reading Dean Wesley Smith's blog where he outlines how, in a few short decades, agents went from the contract negotiator for the author to the slush reader for the publishers, and a scam for authors.

    It does make me want to throw up my hands and tell them that they can all rot in hell together. But even in that (traditional publishing) ship is sinking, it's still beautiful. I want a chance to take a walk on the decks, even if I know it's about to be a mile underwater soon.

  5. Jess: Another comparison I left out but should have been included: There is a lot of positive thinking in the real estate industry. They got to where they are because they said nothing bad could ever happen. Our agent keeps telling us "oh, it's getting better; prices are going to go back up" (in other words, buy now (which is what we're trying to do, but not because we think prices are going back up)). She believes it because the real estate agents want to believe it, not because there is any evidence for it. The evidence says the market is still declining, but they don't want to acknowledge that. The publishing industry is the same. They don't want to look at the decline and try to pretend it's not happening.

    Gina: I think I remember your post about that, but I'll go back and look again. It is a good comparison. I was actually going to make that comparison in the post but decided it didn't really fit in with my theme since I wasn't actually talking about writing.

    Barbara: It is frustrating! Instead of going out and looking for new things, agents are going more and more for the same as what's already out there. They're scared to try anything different, because the industry is too scary, right now. I imagine that's what real estate agents must have gone through a few years ago. I mean, back in the early '00s, every 3rd person you came across (at least out here) was a real estate agent. Not so now.
    Unfortunately, no, no alternative to buying a house, yet. I'm still waiting for that.

    Rusty: I know what you mean. I'm still constantly weighing the dream against the reality. The dream of walking into a store (doesn't have to be a book store) and seeing my book sitting on a shelf. Traditional publishing. It's a beautiful dream. But, then, I look at the industry and ask myself if I really want to be a part of it. But that's probably a different post altogether.