Friday, January 16, 2009

Barry Ritholtz tears into the National Association of Realtors

Barry Ritholtz, who has one of the top ten econ blogs on the internet, recently tore into NAR:
Of all the various parties who contributed to the boom and bust in housing and credit, none have escaped more unscathed than the National Association of Realtors, and their former Baghdad-Bob-in-Chief, David Lereah.

The NAR turned a blind eye to fraud amongst realtors in terms of referrals to corrupt appraisers and mortgage brokers. They constantly cheerleaded prices, despite evidence to the contrary. For 3 years, they have been forecasting 2nd half price recoveries, dissuading realism amongst home sellers. They continually spun data, presented misleading commentary, and otherwise engaged in behavior that could only be characterized as sleazy.

I find EVERYTHING out of the NAR to be suspect, tainted and generally worthless. The NAR Housing Affordability Index is essentially worthless; from 1989 - 2009, the NAR showed housing as “Unaffordable” for just one month.
It is especially notable that mainstream journalists, while accusing many on Wall Street and in government of wrongdoing, has let the National Association of Realtors off the hook. I suspect the journalists are just protecting what they consider a valuable news source. "Don't bite the hand that feeds you," as the saying goes.


  1. yawn...

    we all know the realtors are hosed. they will need to go back to washing dishes (if they can even find the work). ereah lied. The whole system was corrupt. People were made into suckers at record rates.

    Now the big question is - when will the bubble be completely flat - when it is time for all those who stayed on the sidelines to get on the playing field?

  2. that assumes that there will still be a field left to play on...

  3. Complacency sucks.

    Where's the call for reform?

    Where's the desire to punish the wicked?

    Why can't we control the sheisters in this country?

    Answer: It's all based on leadership. Our leaders used to call for morality. Not since Reagan have we had that. Noone wants to stop the money train now.

  4. Economists are by design "objective," a distinction rendered moot when you are an "economist" for an association representing the largest purchase a typical consumer makes in a lifetime and allows his or her comments to be aired publicly.

    Whether it's Lawrence Yen or David Lereah, they are both shysters and frauds.