This article was meant to be about my feelings on NAR and that idiotic things that organization does from time to time. But the references to my parrying the bubble bloggers earlier in the same week led me to this conclusion:
I was wrong. I anticipated a decline but not to the degree that we’ve seen, not to where prices are where they were a year or more before the 2005 run-up.
This article originally posted November 16, 2006:
Returning from my two-day sojourn down the rabbit hole and into bubble-land …
In some respects my initial characterization of many real estate bubble proponents as being more interested in bluster than facts proved true … for example, my opting not to comment on a five-month old market valuation report in favor of waiting for something far closer to current was interpreted as my inability to understand what was written … but I also encountered some very thoughtful, logical debate both from some of the commenters here and also (believe it or not) the HousingDoom blog.
One suggestion I would make to the bubble folks is if the true implication you are trying to make is not that the market will “pop” like a bubble and instead may decline gradually, perhaps bubble isn’t the best term to use. Bubble carries with it certain imagery which leads most readers to assume you’re waiting for the market to pop a la the tech bubble and revert to pre-2004 prices.
Oh, and one last thought … contrary to the notion “if you don’t believe in a collapse, you must be telling clients the market always, always, always is on the rise” … it’s possible to acknowledge the decline without believing it will continue sliding another 20 – 30 percent.
In any event, I received several comments on my bubble myth post from John Hildahl, a well-spoken gentleman currently living in Las Vegas after selling his horse property in Oregon. As he says, he’s renting in Las Vegas and loving it. Personally, I’d simply be happy being fifteen minutes from Margaritaville but I’m afraid I’d be wasting away there more often than not.
One statement John made in his final comment caught my eye:
“My opinion regarding the Real Estate profession, and I believe it is a profession with many talented, hard-working professionals using business skills, people skills, training, education, and perseverance trying to make a living in a tough world. Advice: launch a grass-roots effort and rid yourself of NAR leadership. These so called leaders are making a mockery of the men and women who are real estate agents. Many articles call attention to this.”
Why am I a REALTOR®? And note, you need to be a member of NAR to say you are a REALTOR. For me, it was less a conscious choice than a need for MLS access. In the Phoenix area, the local associations of NAR own the area MLS. You don’t have to join the board, but without the board membership you will not be able to search the listings and take advantage of other services provided in the local MLS system.
Now, would I have joined NAR even if I had not been more or less forced into it? Probably. NAR has an extremely strong lobbying arm and, if nothing else, I believe in self-preservation. So I will not argue that I do not support legislation that promotes and aids the industry.
Having said that … I certainly don’t agree with everything NAR does. I believe the move that caused the DOJ complaint, attempting to limit the listings access for what then was termed “Internet-savvy” (read: deep discount) brokers was short-sighted at best, moronic at worst. After all, many NAR members tend to consider themselves Internet-savvy and I personally count on the IDX listings feed we receive to be one of the primary attractions of my web site. The beagle only gets me so far.
(Quick tangent: for everyone proclaiming what an idiot I am over the last two days, there were nothing but compliments for the beagle. Which means maybe I’m not such an idiot after all, at least when it comes to marketing.)
I believe NAR’s overly optimistic forecasts were misguided and likely caused more harm than good by creating credibility issues for everyone in the industry, not just the association’s chief prognosticator. I also believe the recent ad campaign, “There’s Never Been a Better Time to Buy or Sell a Home,” aside from being lame and lacking any legitimate hook (and shouldn’t an ad have a hook?) adds to the credibility gap.
There absolutely have been better times to sell a home – eighteen months ago, for example. Of course, some people need to sell now for a variety of reasons. And those who opt to price the home competitively and hire a real estate professional who will aggressively market the home are seeing that homes still are selling, not at the same rates as a year ago (or even a couple of years ago, if you look at the numbers I posted two days ago) but they still are selling.
Aside from the credibility issues, there are gaps appearing in NAR’s armor and many are MLS-related. How severe they are depends greatly on the value you personally place on the MLS. Knowing agents in areas where the local brokers own the MLS, I don’t see any significant difference in their business but I do see a possible benefit from the perception of a public who knows not all are REALTORS and therefore are exempt from the broad brush with which NAR members are painted.
And that, folks, could be the biggest problem NAR currently faces. For all the advertisements urging the public to ask their agent “if they are a REALTOR, a member of the National Association of REALTORS” a positive answer increasingly is leading to a negative view.
In many ways I think John is right … new leadership is needed at the top, if only to reform the image that is being battered by the efforts of the current crew.