National Association Of Realtors Calling For A Bailout?
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The National Association of Realtors has since I have followed real estate been the biggest cheerleaders in industry. There is never a bad time to buy a home according to NAR spokespeople.
The cheerleading got so bad that their former chief economist David Lereah recently gave a mea culpa interview saying that he was just providing positive spin as his reputation was so shot.
The image above is Kevin Bacon as Chip Diller in the classic movie Animal House as the crowd panics calling out “Remain calm. All is well!”. That is the image I have of David Lereah and Lawrence Yun the past few years.
So when I saw that Lawrence Yun raised the white flag I figured something was up. And I was correct.
The residential real estate industry is now calling for a bailout for itself…
So let me get this straight. Bad lending and borrowing decision were the culprits in the real estate market going through the roof. Now the National Association of Realtors is asking the government to borrow money to give to homeowners?
Isn’t that what got us into this mess?
Lobbyists for the real estate industry are using the deteriorating housing market data to call on President-elect Barack Obama to devote attention to sinking home prices and sales — the genesis of the recession.
“A real estate-focused stimulus plan is urgently needed,” Lawrence Yun, the trade group’s chief economist, said in a statement.
The U.S. has been coping with the worst housing recession in decades, and many in the real estate, banking and mortgage industries are poring through each month’s data for signs of a bottom, with no luck so far.
U.S. existing home sales plunged to a rate of 4.49 million in November, down 8.6 percent from October. When the final tally for 2008 is complete, it is likely to be the worst year for home sales in at least in a decade. Plus, with job losses mounting, there appears to be no quick turnaround this year. via BusinessWeek.
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Comment by CompeteRealty on 9 January 2009:
Realtors (just like everyone else in this country) are going to be require to tighten their belts in just the same way as every other industry is.
I speak with agents and brokers every day who have just as many closing now as they did 2 years ago. There is still more than enough market share for a great agent to operate in any part of this country. Always keep in mind that an agent that is knowledgeable, passionate and driven will always be in high demand.
Comment by Jolynne Ash on 10 January 2009:
Did anyone actually read what NAR is asking for? They want the $7500. tax credit currently being offered to first time home buyers extended to include all primary residence buyers, AND to make the credit a true credit and not an interest free loan. How is that a bail out?
I got a tax credit last year for installing a tank less water heater in my home because the government is trying to encourage energy efficiency. Now they are trying to encourage home buying? What the difference?
Until we get the current inventory of unsold homes down to a reasonable level, we can’t turn the corner on this recession.
Jolynne Ash/Broker Owner
DreamStreet Real Estate
Portland Oregon
Comment by Allen Davis on 11 January 2009:
With all the bail-outs going on, who is going to bail out the future taxpayers who will ultimately have to pay the bill?
Comment by Jim Reppond on 11 January 2009:
“The residential real estate industry is now calling for a bailout for itself… ”
I’m not sure that you can truthfully call this a bailout. While Realtors will definitely benefit from a stabilizing of the market, what they are proposing is addressing to whole industry through tax credits and other methods to encourage consumers to regain confidence in the market so they will buy homes.
Doesn’t this make more sense than most of the other things the government has been doing?
Comment by Tom Royce on 11 January 2009:
Jim
It may make more sense than what the government is doing for other industries, but the libertarian voice in my head just explodes that it is happening at all. These same politicians are always saying that what they are doing is for the children, but right now they are royally screwing our children as the debt they are placing on their shoulders is make it virtually impossible for them to have the life we are having.
Pork is pork.
So I can not condone what is happening even if it is helping my people. Let’s take our lumps, clear out the mess, and then get started again. Anything the government does will just prolong the misery in the short term and devastate the country in the long term.
Comment by Jim Reppond on 11 January 2009:
Royce,
I guess I just don’t subscribe to the traditional libertarian view that anything and everything a government does has to be bad. I’m more likely to believe that what they do usually has unintended consequences which are often problematic, but occasionally turn out for the better in spite of themselves.
There seems to be a strong general agreement among most economists that some sort of stimulus package is needed or we’ll be watching the economy drive itself over a cliff. There are lots of ideas of what that might look like, but standing by and doing nothing is probably the most risky.
While the mountain of debt this creates is a major and legitimate concern, I’m more worried about the governments ability to discipline itself to push themselves away from the feasting table of spending once the economy starts to get back on track. I’m a big believer in growth through productivity and technology. And I think the future holds some very cool things in store if we can just learn to get out of the way.
Beam me up, Scottie!