For nearly 100 years, Realtors® have subscribed to one of the oldest codes of ethics for trade groups in the country. Today, with the premiere of advertising spots entitled, ‚“Someone You Can Trust,” the National Association of Realtors® explains how its Realtor members‚’ adherence to that code serves and protects the public.
Will it work? Doubtful. The fallout from the housing bubble will induce many people to blame all sorts of people, but significantly real estate agents. The public will remember Realtors who claimed "Real estate always goes up." With such cheerleader clowns like David Lereah and Leslie Appleton-Young as leaders of the real estate agents, the reputation of real estate agents will most likely emerge badly tarnished. The real estate agents are worried.
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The most amazing thing about watching this bubble pop is how the conventional wisdom, as spouted by some realtors and journalists, changed almiost overnight.
ReplyDeleteLast year, and the 2 years before it, all we heard was how real estate always goes up, it's always a good investment, you might see some slowing growth but growth nonetheless etc. etc.
Now, these same people are lecturing sellers that they have to meet the market, that a balanced market is good, that they have to be more realistic.
I think many fools how bought last year will have a bad impression of realtors, and it won't be assuaged by a PR campaign. But ultimately, people are responsible for their own decisions, and you can't blame realtors entirely if you believe everything you hear in the mainstream media, follow the herd, and don't think for yourself.
I recently got a letter from my apartment office saying that they are converting the aparments to Condos. They have intial meeting for current renters where they will give us the first oppurtinity to buy at discount price :-)
ReplyDeleteAny specific question I should ask?
BTW Iam talking about Brookridge Apartments, Centreville VA. This is apartment complex is near exit 53 on I-66.
Don't forget about last fall's "Anti-bubble Reports." The NAR released them to assuage any concerns over the direction of housing prices. In them, the NAR said there was almost no chance that a bubble existed in any of 150 of America's largest cities. And now they want us to trust them as a group that "serves and protects the public"? That is laughable, at best!
ReplyDeleteDavid's posting is poppycock, pure and simple.
ReplyDeleteIn previous real estate slowdowns and busts, does anyone remember saying "Hey! That Realtor screwed me! He made me buy that house at an inflated price! And now the price is dropping, my ARM has switched to floating, and I can't afford my mortgage anymore! It's all that Realtor's fault!"
Or maybe: "Hey! That Realtor really gave me the shaft! When she told me to ask for a ridiculous amount of money for my home, I went with it and made a massive bundle on a home that I only owned for a couple of years. Boy, oh boy! She really screwed me over!"
Likewise, does anyone say today that stock analysts and brokers are the scum of the earth because of all the hype that went on during the stock market bubble of the 1990s?
Like I said, pure poppycock. Simply because a person wants something to happen does not mean it will happen. In fact, real estate agents I have talked to are looking forward to a housing burst because it will drive from the market all the part-time agents who jumped in when the market was red hot. Thus, in a bubble deflating situation, the pool of real estate agents shrinks, leaving those long-term agents sitting pretty when the housing cycle turns upward again. Which means that with less agent competition, don't look for the standard 6% fee to disappear any time soon.
"In previous real estate slowdowns and busts, does anyone remember saying "Hey! That Realtor screwed me! He made me buy that house at an inflated price! And now the price is dropping, my ARM has switched to floating, and I can't afford my mortgage anymore! It's all that Realtor's fault!"
ReplyDeleteLast time there was not the cheerleading and ridiculous reports that are being published by the Realtors.
Housing bubble backlash is only part of the problem that realtors will be facing.
ReplyDeleteEconomists like Steven Leavitt and Stephen Dubner (Freakonomics) feel that in the same way that most travel agents have disappeared, realtors will also. The Internet will eventually allow buyers and sellers to find each other without paying that 6%.
When Leavitt and Dubner spoke about this on the Today show the NAR reacted strongly. See a summary of the story (with links) at this housing blog:
http://weblog.housing.com/weblogs/news/
It's so good it is worth posting:
ReplyDeletehttp://www.freakonomics.com/blog/2005/06/17/professors-dubner-and-levitt-made-erroneous-statements-on-today-show/
I am the 6:46 Anom poster.
ReplyDeleteI'm sorry David, but your response is more poppycock.
Can you honestly say there was no cheerleading by Realtors in past housing slumps? Granted, there was no Internet in those days. But I am sure that if you do a Lexis/Nexis search of old articles, you will find lots of cheerleading by real estate interests saying how the drop was just temporary or how happy days were just around the corner.
I'm sure that in the historical archives of the Realtors, you would likely find brochures, press releases and the like, where they engaged in pep talks and cheerleading.
To say that there current p.r. campaign is unique or without precedence is simply baseless and wrong.
To Don't Buy Yet: So with all that anger at stock brokers and stock analysts from the 90s bubble, one would assume that the public has sworn off on those industries. Yet I don't believe financial companies are hurting due to a lowered demand for brokers and analysts. In other words, people will b*tch and moan and stomp their feet, but in a few years' time, they won't remember who they were angry at anymore.
I have bought and sold real estate in several different states. I have used different real estate agents in each transaction. I have never been told by one that "prices never go down." I'm not saying such stupid statements aren't made by some agents. But I highly doubt it is accurate or honest to paint the entire industry with that broad brushstroke.
My view is that agents will face an eventual decline because of the Internet. But so long as they control the MRIS listings database, and so long as they exert enormous political pressure in state legislatures and Congress, they aren't going the way of the dinosaurs any time soon.
"Can you honestly say there was no cheerleading by Realtors in past housing slumps?"
ReplyDeleteSure there was some but not to nearly the level there currently is. They did not issue anti bubble reportsfor 150 cities back then (lieing throught their teeth).
I've had real estate agents lie to me to help close the deal. One case the realtor told me the vacant land behind the house I was looking at was a planned elementary school. It was actually Phase III of the subdivision - already platted, planned, zoned and approved. That was back before zoning was available online. I didn't find out until after I purchased the property - I didn't really care, but it was still a lie. And that was a "buyers" agent. It's a BS profession, not that most agents are liars, but it's not policed and their code of conduct is non binding. Hence their code is BS unless they plan to enforce it.
ReplyDeleteThere's just no way I could take someone who uses the word "poppycock" seriously!
ReplyDeleteLike I said, pure poppycock. Simply because a person wants something to happen does not mean it will happen. In fact, real estate agents I have talked to are looking forward to a housing burst because it will drive from the market all the part-time agents who jumped in when the market was red hot.
ReplyDeleteSo David's posting is poppycock and realtors aren't scum because after the bubble busts they can make more money and have an easier time doing it. And we are supposed to take this line of reasoning seriously?
David, I think your postings are getting more and more highly subjective and negative in tone. Sure, I don't trust every real estate agent I've come across, but some real estate agents (including mine) provide great advice (including to wait out the downturn- even if my agent won't make money now).
ReplyDeleteSeriously, I'm begining to wonder why you are just getting more and more pissed with RE agents and the RE market.
Count me as one of the people who won't "blame all sorts of people, but significantly real estate agents. Count me as one of those who thinks your note of "cheerleader clowns" and that "real estate agents are worried." (blanket statements) don't add value to your blog and take away from your credibility.
Count my agent and probably many others who tell their clients that "Real estate always goes up." is BS. Yes its true- there are many agents out there who provide good counsel to their clients.
My disclaimer is that I own real estate but am not an agent. I'm waiting for the downturn to buy more RE.
"David, I think your postings are getting more and more highly subjective and negative in tone."
ReplyDeleteThanks for sharing.
"but some real estate agents (including mine) provide great advice "
I fully agree. There are many honest hard working agents who do NOT take advantage of uninformed buyers or sellers.
". Count me as one of those who thinks your note of "cheerleader clowns" and that "real estate agents are worried." "
Where are the honest agents objecting to the deception coming from the NAR?
Just a point of view from San Francisco.
ReplyDeleteI was working with many Realtors, but I haven't met a single "honest one". They *all* - I mean *all* - act as used car salesman. For example, when I ask "how old is the roof?", I'm getting answer something like "the roof is like new". They should say at least "I don't know".
6:46 Anon poster again.
ReplyDeleteDavid, you seem to be changing your story on whether or not there was previous realtor cheerleading. First you say there wasn't any in previous housing slumps. Then you change it to, "Well, ok there was cheerleading, but it wasn't as bad as it is now."
I'm sorry, but I still say poppycock to that. Unless you can provide some sort of sourcing for your claims on that issue, I will simply chalk it up to breathless hyperbole.
Marinite: No, David's posting is poppycock because it is a hyperbolic broad generality. I pointed out in my original post that it is very unlikely that anyone holds a grudge against real estate agents who sold them properites before previous housing downturns. Same sort of idea with the example of stock brokers and analysts. If the reputations of members of these industries truly were fatally tarnished, then one would expect to find very few members of those professions. Yet that is not the case at all.
And why should someone feel agents are scum because they in a housing slump, all the part-timers will drop out and leave sales to the full-timers? That's just a dumb statement to make. It's simple supply and demand (a concept many on this blog seem to either have a major problem with or simply don't understand).
And I agree with the poster who said some of David's postings are becoming much more negative and subjective. Analysis and fact-checking is being pushed aside for hyperbole and bitterness. I thoroughly enjoy the fact-checking of the statistics being reported by the real estate companies. I also enjoy the listings of run-down shanties.
But what is becoming tiresome and a real detriment to this site is the negativity and bitterness. So what if Joe Poster won't pay the asking price for a crappy property? Does anyone really care? All that matters is if the seller is able to find someone who will pay. Joe Poster can then go back to patting himself on the back, while the seller just made a bundle of money. Complaints like the one about the AP article that quoted multiple housing "experts", but didn't quote "independent economists" like Paul "former Enron advisor" Krugman, are just silly.
Focus on facts and leave the rants for others.
The mainstream media does a lously job reporting. It is very rarely that the media points out the inherent self interest of the corporate associations. It should.
ReplyDeleteI'm the "9:36 a.m." poster. David, you replied by asking:
ReplyDelete"Where are the honest agents objecting to the deception coming from the NAR?"
That response struck me as odd and somewhat uninformed. If I used that logic as a retort, I'd probably be kicked out of college for lack of critical reasoning.
If you were part of the Enron and MCI juries, I'm sure you would arrest every single employee of those companies, right?
"If you were part of the Enron and MCI juries, I'm sure you would arrest every single employee of those companies, right? "
ReplyDeleteNope.
"If I used that logic as a retort, I'd probably be kicked out of college for lack of critical reasoning."
It is just a point not a retort.
David, please excuse yourself for having an opinion. How dare you! You are forbidden from expressing your opinion on your blog named "bubble meter". In fact, you need to change the name of your blog to "maybe there is a bubble, but maybe there isn't a bubble-meter". :)
ReplyDeleteNo one is "trashing" David. What some are doing is pointing out some errors and misstatements he has made in his postings. If a person can't take the heat, then they shouldn't have a blog. Simple as that. David, to his credit, can take the heat.
ReplyDeleteNo one has said he can't have his opinion. But opinions have to be based on actual facts, not made-up facts.
And as for skytrekker's comments, that's the sort of silly hyperbole I was referring to above. Win an argument with actual facts and logic, not childish retorts.
Realt-whores lie in so many insidious ways, I've thought of starting a whole blog where people can share their stories of scheming agents. Just recently an agent told me a nearby military installation would get "Tens of thousands of jobs due to Base realignment" that was make prices "skyrocket". I spent a half hour wading through the terribly designed DOD pages about it...well, guess what, the base is getting a net gain of LESS THAN 1000 JOBS, civilian included!
ReplyDelete"So with all that anger at stock brokers and stock analysts from the 90s bubble, one would assume that the public has sworn off on those industries."
ReplyDeleteno, but discount brokerages have emerged in force... $4/trade regardless of # of shares instead of some broker's 5% sales load. that's a huge hit to commissions. sure several factors contribute, one of those being mistrust.
But the biggest factor leading to the rise of discont brokerages is what you just mentioned: cost! The lower commissions charged by the discount brokers will result in people flocking to $4 trades, instead of $19.95 commissions. Money is the issue, not mistrust.
ReplyDelete6:46 Anon here.
ReplyDeleteSkytrekker - No to either of your questions.
I don't think the rest of your tirade has much to do with real estate, a housing bubble, or the cost of tea in China. It wasn't even a good rant. Just lots of angry rambling.
The real estate people will now change and try to make a living off of panic selling . They will under estimate the value of property , only show comps of flipper distress sales . The real estate people will try to bloodsuck the people by creating a new market on take advantage of the downturn . They will show flipper stories of houses being on the market for 6 months . They don't care ... going up or going down they attach to the weakest link . Realtors have always just shown the comps they want . This is why ZILLOW is a good service because it shows real sales . The sales people also only show buyers the high comp sales or listings to make the buyer feel they are getting a good sale . Maybe 1 in 10 is a good joe .
ReplyDeleteLegal case law shows that they make allowances for "SALES PUFF". This means as long as you dont put you lies in writing in the Real Estate business , they cant nail you . It goes back to "BUYER BEWARE ". Also the home inspectors are a bunch of in bed with real estate agent whores . The ones that are trueful dont get business . The real estate inspectors put so many disclaimers on their reports that its a joke.
Rather than stating a opinion the HOME INSPECTORS suggest you get 10 other opinions from 10 other contractors . The buyer only has a month or two months to close the escrow therefore its impossible to get the true condition of the property . The home inspector set the buyer up to have to pay a couple thousand dollars to get all these seperate reports from different contractors ,roof, foundation , electric etc.
ReplyDeleteIn other words the Inspector clips you for 500 bucks to tell you you need 10 more expert reports because they cant comment on specific areas. The real estate contract gives you 14 days to do all your inspections , so your shit out of luck . These are the inspectors on the REAL ESTATE AGENTS LISTS .
ReplyDeleteI'm sorry you feel that way skytrekker. Can you point to a comment that would show that I am a liar? Because otherwise, I think your reputation will be of one who simply uses hyperbole and tangents, instead of relying on any provable facts and supportable hypotheses. You rage that I am a Republican and a real estate agent. I say I am not to either. You yell and scream about Bush & Greenspan. I am neither, so I can't say anything on their behalf. If you have proof of my supposed lies, then by all means put it forward. Otherwise, your childish rant will be seen for what it is - mere sound and fury signifying nothing (my apologies to Faulkner).
ReplyDeleteGood day.
Also, if you are going to use a cliche to prove your superior intellect, please make sure to use the right cliche.
ReplyDeleteThe tired cliche you were trying to use is "smoke and mirrors", not "smoking mirrors."
Good day.
It's my humble opinion that real estate agents ought not be allowed to represent both sides of a transaction. I think it should be illegal and enforced with stiff penalties. I have wrestled with this issue for months, since getting married and first thinking about buying a home, and I do not know how it can be worked out so that the "buyer's agent" can earn a fair fee, and not end up working unofficially for the seller, but something needs to be done. Like any other business transaction (and for the vast majority of people this is the largest purchase they will ever make), there should be a lawyer on each side negotiating the terms of sale, not an agent who is trained to get the most money possible for the seller. Again, how this can be instituted without the buyer's agent/lawyer ending up working on behalf of the seller anyway, or how it can be instituted so that the buyer's agent/lawyer can earn a fair fee, escape me. But there has to be a way...
ReplyDelete