Dalton Gets the Years Last Laugh
Courtesy of NAR Chief Economist Larry Yun
Best wishes for all for a very happy, safe and prosperous 2008.
My one resolution for this blog is to post more frequently…
Some Interesting Commentary from *Outside* the RE.net on NAR Forecasts
As real estate professionals and webloggers, we often tend to get sucked into our little corner of the world. We all have our opinions of NAR forecasts, be that good, bad or indifferent. I happen to believe it is good to step outside the real estate world and take a look at how those who don’t sell real estate for a living perceive things…
The NAR’s Sunshine Boys - via Popmatters.com
You can’t trust anything their forecasters say.
This is apparent to anyone who follows developments in the housing industry in the business press, yet the business press continues to report their meaningless sunshiny accounts of the economy as though it constitutes news, discrediting other analysts across the board. Journalosts could get much more reputable numbers from the National Association of Home Builders, a trade association rather than a sales association, with less of an agenda in its forecasts.
This post refers to an article on Slate — Worst. Forecasters. Ever? The cockeyed optimists of the National Association of Realtors — that was posted on December 10.
And speaking of the Slate article, last week Daniel Gross, the author of that piece, held an online Q&A on the Washington Post:
Slate columnist Daniel Gross was online on Washingtonpost.com on Dec. 13, 2007, to discuss the National Association of Realtors’ sunny report on the housing market and other financial topics. An unedited transcript of the chat follows.
Here is the link to the transcript. This is very interesting reading folks…
Calculated Risk on the 2008 NAR Forecast
Calculated Risk (a fabulous blog BTW), just posted a little analysis of the NAR’s 2008 housing sales forecast, complete with spiffy charts.
Their take?
Based on slowing turnover rate and tighter lending standards, we can probably already say the NAR forecast of 5.7 million units in ‘08 is way too high.
Looking forward to their forecast…
Noah Calls Out NAR “Predictions”
The ever brilliant Noah Rosenblatt digs into the NAR’s always rosy, often incorrect housing market predictions.
“. . . lets check in on the NAR’s track record for the past 12 months or so. The NAR has unsuccessfully predicted housing trends for 70% of 2007! For the past 9 months, count ‘em NINE MONTHS, the NAR had to downwardly revise their housing predictions; which were unsurprisingly too bullish.”
This is required reading folks.
Strengthening NAR’s Value Proposition
As a starting point, can we all agree that there are areas in which the National Association of REALTORS can improve both in the perception of the public and of its members? I hope so. All of us can improve in one way or another. Of course, if you believe NAR is fulfilling its mission perfectly already, you’re excused.
Let’s take the public side first. One of NAR’s main advertising messages is that all of its members subscribe to a strict Code of Ethics. Which is true, as far as that goes. Being a member of NAR does mean we’ve subscribed to the Code of Ethics. But very few of us join NAR specifically because our personal business beliefs align with the COE. In fact, the COE often is an after-thought thoroughly secondary to the real reason to join NAR - to have MLS access.
This isn’t an issue in all areas and those in real estate markets where the local boards do not control the MLS have my undying envy. That’s not the case here in Phoenix. If you want to have MLS access - if you want access to listings to search for your buyers and to what remains the best marketing vehicle out there - you MUST join NAR.
It’s not mandatory, as I’ve been told. But it’s necessary if you want to have any business.
If NAR wants to strengthen the COE as a value proposition to the public, surrender the control of the local boards to area brokers. Get out of the listings business and focus on your core purpose of promoting real estate agents in the eyes of the public and all levels of government.
Give real estate agents the choice whether they will live up the standards of the COE and give teeth to the statement that NAR members subscribe to such a strict code; those who choose to join when their MLS access no longer depends on membership truly will meet the high standard implied in the advertising.
Now the agent perspective. Stop with the monthly forecasts. Or, at a bare minimum, force the senior economist du jour to anchor his remarks in reality at some point in time.
David Lereah and Lawrence Yun have done more to damage the trademark than any other forces in action. There are many agents who subscribe to the same “it’s always a great time to buy, real estate never falls” theory of real estate economics; fortunately, they’re limiting their damage to the people with which they come in contact.
Lereah and Yun, however, are quoted widely. And in the nearly two years of desperation fantasies guesses about the timing of the market bottom they’re ignoring the very basic reality of this business. For many of us, our success does not depend on the condition of the real estate market.
Mega-producers such as Russell Shaw have said this forever. But any agent, with a little bit of effort, can find ways to succeed regardless of market conditions.
The most overrated question in our business is “how’s the market?” (At last week’s sales meeting I shouted Tom Hopkins’ “Unbelievable!” just for the fun of it.) The market isn’t good. The market isn’t bad. The market is what the market is. People still buy. People still sell. It’s up the us as real estate professionals to find them.
Constantly striving to call the bottom implies that the market is “bad” when there is no such thing as an empirically “good” or “bad” market. There are seller’s markets and buyers’ markets and neither is better for the other. Working primarily with buyers in 2005, I was hard pressed to say the market was great. It was great for the sellers. It was horrifying for my buyers.
And that doesn’t even touch on the fact that constantly calling for the bottom only serves to destroy both your credibility and that of the organization you represent - and all of its members by extension.
NAR isn’t broken beyond repair. As a lobbying group, NAR remains incredibly strong. A large portion of the effort is put forth on behalf of real estate agents but NAR also takes stands on multiple housing-related issues that primarily impact consumers. Our local lobbyist cringes when we joke that nothing passes he doesn’t want passed, but I don’t think we’re too far off the mark.
There’s value in that.
There’s value in conveying an accurate assessment of the real estate market without the speculation that a recovery’s around the corner. We won’t see the recovery until it has happened; calling for it monthly is folly. We’re not at a point where NAR report accuracy.
There’s value in having a membership that truly believes in the (overly lengthy) Code of Ethics rather than a membership who only wants MLS access and considers the bi-annual ethics training little more than a nuisance of doing business. We’re not at a point where membership is optional, either.
Truthfully, there’s virtually no chance of NAR surrendering the local Multiple Listing Services without a broker-level revolt. Though there are a few dissenters, most notably in Minnesota, NAR isn’t looking to shrink its membership ranks. In fact, anticipated drops in membership led to a dues increase for those who remain. Apparently the fiefdoms built while the market was running in overdrive cannot be broken down. Or no one at NAR headquarters has the will to destroy them.
Want my support for the ongoing Public Awareness Campaign, Richard Gaylord and friends? Take the steps above as a starting point and it’s yours.
<Editor’s note: this post is a contribution from Jonathan Dalton>