A CNN Money article today really cuts to the heart of the problems the National Association of Realtors face.
They are the trade group for real estate agents across the country and their job is to promote real estate sales and make sure that agents are honest and trustworthy and get the best commission they can.
That is all well and good. But then they also portray themselves as the voice of real estate, and it is where they get into trouble.
Take a look at these two quotes:
First we have Lawrence Yun, the chief economist for the NAR:
“The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market,” said Lawrence Yun, NAR chief economist. “For people who were on the sidelines, there’s been a return of buyer confidence with stabilizing home prices, an improving economy and mortgage interest rates that remain historically low.”
That is some quality information that comes across as trustworthy, reliable, and actionable. He is telling us that the tax credit had the impact we hoped it would. There will be some backsliding but in the end confidence is returning.
Great stuff!
Then we have the second quote by the NAR President Vicki Cox Golder:
Despite the termination of the tax credit, NAR president Vicki Cox Golder also anticipates buyer traffic to hold up in May and June.
“Some realtors tell us they are very busy with clients who are entering the market now as a result of improved conditions, while others are welcoming a slowdown from frantic market conditions in recent months,” she said.
Yikes. She is saying traffic will remain the same after the tax credit? What is she smoking besides her cheerleader pom-poms. Any moron could see that once you pulled forward buyer with a subsidy from the government you will see a slowdown in the market. But here we have the President saying all is fine and traffic will not decrease?
This is the BS that the NAR has been spewing for years and it is what reminds the general public that all they are is a trade organization that will tell what ever story you want to hear to sell a home.
For the real estate community and REALTORS specifically, you should contact the home office and remind them that pie in the sky pronouncements in this day in age do not do anything good for the real estate market.
People remember that in 2006, 2007, and 2008 the REALTOR brass constantly said that the recovery is coming in the next quarter. People who trusted these prognosticators lost significant amounts of money. For many the losses were their life savings and their credit.
So Vicki Cox Golder, do your REALTOR members a favor and stop cheerleading. Let Lawrence Yun do the talking about the future. We trust him.
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How could we forget, “Now’s a great time to buy”? While Yun’s predictions are probably much more reliable than those of the cheerleaders, they have proven to be a bit overly optimistic- thus the nickname Sunny Yunny.
It's just the opposite of what the mainstream media does, which is to over-hype the negative aspect of everything. I'm not saying the news hasn't actually been bad, but overly negative news creates an overly negative perception which hurts the market as well. For me, a little optimism is welcome, as long as you recognize it as such.
Actually, saying it will continue through May & June shouldn’t be a big surprise as the top part of the sales years is always the second quarter as people moving need to be in before School starts in the Fall. It will probably bear our reasonably well.
In our market it always bulges in the summer and shrinks in the fall and early new year then ramps back up again for summer. Its very predictable. Did the home buyers credit help? Absolutely. Will the removal hurt? Absolutely. But interest rates have actually dropped which may put other buyers out there.
To work at NAR, you must have a cord put in your back. When pulled, you utter, “it’s a great time to buy.”
Of course, trade organizations are useless if looking for objective information. This isn’t a crack at NAR. It holds for all. If you asked the candy bar association about the nutritional value of candy, they would spew some junk about candy being a part of a balanced diet.
Real estate has one more giant shoe to drop on it. It is interest rates. Right now, we are benefiting from the Euro mess as investors rush to the dollar. Someday, investors will lose faith in the dollar, and rates will rise precipitously. This will have a huge impact on housing affordability because we will not see a proportional rise in incomes.
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