SocketSite is a San Francisco Bay Area real estate blog that was founded by Adam Koval in February 2005. The site has a negative bias on San Francisco real estate since its founding.
As a San Francisco resident since 2001 and an owner and seller of San Francisco real estate since 2003, I wanted to share with you some insights on one of the oldest SF real estate blogs. I’m also an online media property owner (Financial Samurai), which is why SocketSite’s story fascinates me.
It is a cautionary tail of how our negative biases can limit our future.
Why Does SocketSite Have Such A Negative Bias?
To understand why SocketSite has a negative bias on San Francisco real estate, despite its massive historical price appreciate, we have to understand Adam Koval’s background.
Adam told SF Gate in 2007 that he’s been obsessed about real estate since he was a 12-year-boy growing up in Oregon. After his parents spent a small fortune sending him to the University of Pennsylvania, Adam went onto investment banking. He didn’t last long.
After leaving investment banking, he went to Dartmouth for his MBA. After spending another handsome sum of money on tuition, Adam wasn’t able to find a high enough paying job so he could buy San Francisco real estate.
Getting a fancy private school degree is nice for the ego. But it can also really crush the ego if you don’t do something amazing after. But the reality is, most people who graduate from private universities end up doing the same thing as everyone else.
Disappointed by his lack of career success and ability to afford San Francisco real estate circa 2005, Adam Koval started Socketsite to vent his frustrations.
I give Adam props for doing something about his frustration. Most people just sit around and complain without doing anything about it.
Why SocketSite Grew And Then Sputtered
In July 2007, when SF Gate featured SocketSite, Adam said his site received 300,000 unique visitors a month. Socketsite focused on a lot of conflict and gossip.
Given the majority of San Franciscans are renters, Adam was able to play into the angst and frustration of many city residents. He also was able to connect with many frustrated homebuyers like himself.
However, as of June 2020, SocketSite received 92,560 visitors 13 years later according to SimilarWeb. In other words, SocketSite’s traffic has declined by a whopping 70% since 2007.
See the graphic below.
The reason why SocketSite’s traffic has tanked is because SocketSite has been overly negative on San Francisco real estate since its founding. Instead of showing a balanced view or a true picture of the San Francisco real estate market, SocketSite will always pick out a negative story.
We all know the saying, “if it bleeds, it leads” as it relates to mass media. The more you can highlight negative stories and stories of suffering, conflict and so forth, the potentially more clicks you can get.
However, when the San Francisco real estate market went up 100% since 2012, people stopped trusting SocketSite with all its negative stories. People saw through the bias and just got tired of the site’s always pessimistic outlook.
The irony is, SF brokers advertise on Adam’s site to get leads. This is despite Adam constantly bashing the SF real estate market. Consequently, fewer SF brokers advertised over time, especially as the site’s traffic declined. It made no sense to advertise on a site that was bashing its own industry.
Below is a chart showing San Francisco’s home price appreciation history.
SocketSite And Adam Koval’s Missed Opportunity
Adam Koval could have grown SocketSite into a much larger website if he was more balanced in his features. However, his frustration with his career and inability to afford San Francisco real estate ended up hurting him in two ways:
- He missed out on one of the biggest San Francisco real state bull runs in history. Perhaps the 2012+ recovery was the biggest bull run in SF real estate history.
- He missed out on growing SocketSite into a larger, more reputable site. The larger the site, the more revenue it would generate.
From a personal finance perspective, this double hit is really unfortunate. It shows how one’s biases and frustrations can really limit one’s growth and wealth.
We’ve been talking about abolishing limiting beliefs on Financial Samurai since this site was founded in 2009. Unfortunately, Adam let his frustrations get the best of him.
How You Can Use SocketSite To Get Better Deals
What I am thankful for is using SocketSite’s negative stories to help me and others get better deals.
In 2014, I printed out a couple negative SocketSite articles and handed them in with my offer letter. The listing agent was a 72-year-old neighbor who grew up with the sellers.
The negative articles helped me save $40,000 off the list. The home has since appreciated by about 50% based on recent comps (this article highlights a series of latest sales during a pandemic).
I’ve encouraged other readers to leverage SocketSite’s negative articles when making an offer as well. Many have had great success getting better deals as well.
In 2020, we know that real estate is very strong across the country and in many parts of San Francisco due to record-low mortgage rates and the NASDAQ, which is up 25% for the year. Tens of thousands of people working at Facebook, Google, Apple, and Tesla are much richer after the pandemic began. And some of these people are buying homes and upgrading.
There are countless examples of massive overbids and record-high prices, particularly on the western side of San Francisco. But Socketsite won’t feature these huge overbids. Instead, it will focus on condos and properties with issues that sell below asking.
Missing out on such massive gains on an asset class you’ve written about every day since 2005 can make any sane person go crazy.
Can SocketSite Be Trusted?
If you are a renter or a potential buyer, SocketSite is more entertaining and can be useful in helping you get deals. Just make sure you realize that SocketSite missed a big real estate run up and is negatively biased.
The next time you see a SocketSite article highlighting how inventory is surging, you’ll know better why it doesn’t also highlight the commensurate surge in demand.
During a pandemic, obviously inventory is higher in the Fall because of shelter-in-place that was enacted on March 18, 2020. Spring inventory simply shifted to the second half of the year. Public open houses are shut down.
The good thing about SocketSite is that it does often highlight some of the tricks Realtors pull to make properties seem better than they really are. For example, some Realtors like to delist properties and then re-list at a lower price to expunge the days on market count. If they then sell, after lowering the price, they can claim they sold above asking vey quickly.
In conclusion, SocketSite is a cautionary tail of how your frustration can really cloud your judgement, hurt your business, hurt your career, and suppress your wealth potential.
We ALL have frustration and biases, including this site. However, it’s important for us to get some objective feedback. Otherwise, we’ll end up like SocketSite, a permanent pessimistic who constantly misses out on opportunities.
About the author: Sam has lived in San Francisco since 2001. He began buying San Francisco real estate in 2003 to build passive income. He also sold one of his SF rental properties in 2017, so he sees both sides of the market. Financial Samurai began in 2009 and is one of the largest independently run personal finance sites with over 1 million organic pageviews a month.