The NAR Announces the 2008 Going Out Of Business Sale!..maybe not but it sure looks that way
January 8, 2008
Would the last one out please turn off the lights?
As CNN Money reported and after reading the information released today by Lawrence Yun on behalf of the National Association of Realtors, you have to pretty much call it lights out for many, many, real estate agents. The only alternative being an all-out going out of business sale which few seem ready to be involved in.
The National Association of Realtors’ Pending Home Sales Index, which measures the level of sales agreements, fell 2.6 percent, turning noticeably lower after two months of modest improvement from a record low hit in August.
The National Association of Realtors also cut its existing home price estimate for the current quarter meaning we are now about to experience the steepest drop in price measure on record. The revised estimate by the NAR was more than double the decline they had predicted..OUCH!!
Being that the NAR estimate was only given last month, what in the “Sam Hill” were they reviewing? What kind of data were they looking at and spewing forth that now finds them to be twice as wrong as previously expected?
What’s even worse, is the the NAR additionally forecast that they can no longer project even a modest rebound in existing home prices this year, as it had previously forecast, and pushed back the estimate of a full-year uptick in prices to 2009. A full year! They have thrown in the towel on 2008. One week into the new year and it’s done, over, kaput. See ya in 2009!
What happens if this forecast is twice as wrong as well and matches the performance of their last forecast? The data from the NAR is so bad that it even was worse housing news than what was experienced following 9/11.
How bad does the NAR see it? When do they project a return to the land of multiple offers and rapid appreciation bringing riches to all of it’s buggywhippers…they don’t even know!
“Consumers continue to wait for additional signs of market stabilization,” Lawrence Yun, chief economist for the Realtors, said in a statement. “There are more people with financial capacity now than in 2005, but many are trying to market-time their purchase. As a result, the exact timing and the strength of a home sales recovery is a bit uncertain.”
That’s the answer? That’s what you expect 1.5 million of your followers to do? You want them to tell their clients to forget 2008? Okay, works for me!
Now perhaps we can get down to some business and get going on this “Going Out Of Business Sale” after all. I mean that’s what it is is it not?
An over abundant supply of inventory, a national forecast of uncertain, yet continued price decline (what happened to the real estate is local mantra?), foreclosures at an all time high. Yep, sounds like a salvage opportunity to me and I can’t wait.
So how is the floundering buggywhipper to navigate the giant national fire sale. Let me offer a bit of advice.
1. If your client does not NEED to sell, take the house off the market. It will NEVER sell because the Seller does not and will not understand that his property value is about to s#&t the bed. If he is just seeing what he can get he is wasting the agent’s time and the prospective buyer’s time. Cancel the listing and tell him to batten down the hatches. He should be safe, we’re looking for roadkill!
…..and
2. If he NEEDS to sell, download every possible bit of information regarding the market going south, from newspapers, compile videos, ask for sound checks, put it all together, give it to the Seller who needs to sell, drop the price as low as it takes to get multiple offers and tell the Seller to guard the women and children. It’s going to be a frenzy and we are not taking any prisoners. Let him know we eat the young. Make sure even your bosses at the NAR say they can expect no protection until 2009. The cavalry isn’t coming. Just avoid the bloodshed and set the price correctly now. Finally, the erroneous stigma of a “low-ball” offer is removed.
3. Comfort your Seller. Let him know with passion that none of the letters on your business card allowed you to see this coming. After all Lawrence Yun is your organization’s chief economist and in 30 days he blew his projections by 200%. …and he gets paid a salary! What did they expect from you. It’s not even like you could have pulled a Son of Sam and said the dog on your business card whispered a bit of advice in your ear. Just let them know that either way, you still get paid and that a mercenary’s bank account is never dry.
4. Lastly, despite the absolute pounding your client is going to take, defend your commission at all costs. Let him know you worked EXTREMELY hard on his behalf. Let him know how tough it is to return phone calls. Let him know that entering characters into the MLS requires a special skill and that as a professional, you are entitled to be paid just as his doctor or lawyer are entitled to be paid. You can’t ask the doctor to take less because you are sick, you can’t ask the lawyer to take less because he lost your case, so as a “professional” let him know that despite you being wrong on every possible facet of his transaction, despite not spending a dime on marketing, despite returning one out of ever 20 calls…maybe, you are still getting yours!
Finally, you need to tell the Seller that nothing hurts as much as it seems. Before you leave the Seller breathless and bleeding profusely, tell him to just wrap a tourniquet around it and realize 2009 will be here before you know it!
After all, he can count on that because his agent and the NAR told him so.
Here is an update to this story.
Where are you pulling this information. I went to the NAR website and was unable to find it…. Please advise. I would like to read it.
Also, one of your technorati tags says “real estate agents suck” what’s up with that?
Hello Bryan and thanks for commenting.
In reference to your question about the NAR website and the information above, you can find it at this link: http://www.realtor.org/Research.nsf/Pages/PHSdata
Also, you can find out what the media is saying by taking a look at a number of stories quoting the NAR information:
http://money.cnn.com/2008/01/08/news/economy/home_sales/index.htm?postversion=2008010812
http://afp.google.com/article/ALeqM5i8sgXk899C90IneuKrQ0kKKN0y9g
http://www.nytimes.com/2008/01/09/business/09econ.html?ref=business
There should be enough reading there to get you going.
As for the tags that Barry C puts on his posts… I will let him talk about that and let me tell you, the answer is not necessarily what you might think.
Hey Bryan, it’s all over the news. Are you an agent? Don’t you check what your guys at NAR release to the press?
As for the technorati tag…if you are part of the 10% of agents who do 90% of the business I applaud you and then it most assuredly does not apply. On the other hand…
Actually, I think I’ll tell my sellers this:
Our market has seen the following:
1. After 2006 saw a 12.3% increase in single-family home sales over 2005, 2007 only saw a 3.1% decrease in single-family home sales compared to 2006.
2. Single-family home prices continues to rise, and in 2007 gained 4.33% over 2006. Our market has not seen a decrease in the average sale price in the past 5 years.
3. The average time it took to sell an existing (resale) single-family home was 77.4 days in 2007, compared to 79.7 days in 2006, and 90.6 days in 2005. In fact, the average days on market has not increased in any of the last 13 quarters, when compared to the same quarter the previous year.
The national news (broadcast, cable, and/or print) has NEVER acknowledged that real estate is local. There are plenty of markets throughout the country that are still seeing positive numbers, and do you know what the difference is in those markets compared to those feeling the current crunch? Lack of greed. Do you honestly think anyone should expect double-digit appreciation on their home? Do you think people should, in some cases, make more money by simply living in their home, than the average person does in yearly salary? The problem is that some people began to think that it was a given.
What does this mean? You have some family out in who bought a home 5 years ago for more that it should have ever been worth to begin with, they held on a little too long, but in the time that they’ve owned it, the home has appreciated by 10% per year. Now they’ll have to wait a couple years for the market to correct, and they’ll still make a profit, just not as large, but probably larger than they deserve (i.e. most people making these insane gains on property, probably didn’t even have to replace a light bulb).
You also have person B who just bought a home, say 12 months ago, in . This person didn’t once question the fact that the same home sold for half of what they paid, only about 3 years ago. Did person B ever consider the fact that the same exact home, in some cases built by the same exact builder, was selling for 40-60% lower in a reasonable market?
Correct me if I’m wrong, but I think you’re supposed to “buy low, sell high”. Whose fault is it that some people got it backwards?
Stable growth is always the way to go. If you happen to live in an area where properties are appreciating by record numbers, fine, but know that it probably won’t be the case forever.
As an active and productive realtor in Myrtle Beach SC, I’ll suggest the following. NAR is governed and controlled by Democrats (Just a guess). Their unwillingness to step up with advertising money to state the obvious is disturbing. As of today you can secure an interest rate for a primary home under 6%.
I bought my first home in 1981 and my interest rate was 20.99%. I bragged about that rate at work the night I secured it and my lender at that time picked up a lot more business over the next couple of weeks. Why, because the average rate at that time was close to 23%.
I.e. this is a great time to buy. Home prices have hit there bottom and we are now starting to see a slight increase.
I have emailed NAR a number of times in the last couple of months and asked them if we have an advertising budget? What is it? And why are they not using it to counter the nightly news message of gloom and doom???
The Democratic party wants the housing industry to stay in the tank for another 11 months until the election is over. This would bode very well for them across the board. THEY DO NOT CARE HOW BAD THAT IS FOR AMERICA. I can think of no other reason that NAR would remain silent.
If you want a deal on real estate please email me or give me a call NOW IS THE TIME TO BUY!
ANYONE WHO STATES THIS IS THE TIME TO BUY (A HOME) HAS GOT TO BE ON CRACK!!!!!!!!!! I AM A REAL ESTATE AGENT ABOUT TO GO OUT OF BUSSINESS FOR THE SIMPLE REASON THAT I HAVE BEEN VERY HONEST WITH MY BUYERS AND SELLERS! SIMPLY STATED, (TO THE BUYER) HOW THE HELL DO YOU EXPECT TO BUY A HOME IN A CRAPPY PART OF FLORIDA FOR $200,000 (APPROX. $1900 PAYMENT INCL. TAX, AND INS.W/ 10% DOWN= $20,000) WHEN THE AVERAGE WORKER MAKES $7.50 AN HOUR AND YOU ARE LUCKY IF YOU WORK FULL TIME. A REG. NURSE MAKES $13.00 AN HOUR (BIG SHIT!!!). (TO THE SELLER) WHEN YOU SELL YOUR HOME WHICH YOU PAY HALF OF WHAT THE MORTGAGE IS GOING TO BE ON YOUR NEXT HOME HOW LONG WILL IT BE BEFORE YOU LOSE IT TO FORECLOSURE? WAKE UP EVERYONE, THIS ISN’T ABOUT THE HOUSING MARKET!!!!! THIS IS ABOUT THE 75% WORKFORCE OUT THERE THAT WORK ON HOURLY WAGES AND JUST CAN’T AFFORD TO PAY FOR THEIR HOMES, OR CARS, OR CREDIT CARD BILLS, ETC. ETC., ETC., DUE TO THE MASSIVE INCREASES ON TAXES, INSURANCE, GAS, AND JUST ABOUT EVERYTHING ELSE!!!!!!!! THIS WORLD HAS GONE TO SHIT FOR THE WORKING CLASS. IN THIS ECONOMY MOST WORKING CLASS PEOPLE ARE ACTUALLY BETTER OFF STAYING IN A RENTAL APARTMENT, APPLYING FOR SECTION 8, FOOD STAMPS, MEDICAID, AND ANY OTHER PROGRAMS AN UNEMPLOYED OR UNDEREMPLOYED PERSON CAN OBTAIN AND PROBABLY MAKE MORE MONEY AND LIVE A BETTER LIFESTYLE. SIMPLE CALC. FOR FAMILY OF 4= FOOD STAMPS $450, MEDICAID = $475, SECTION 8 $675, WIC PROGRAM= $150) JUST DO THE MATH AND PUT YOURSELF IN A $7.00 AN HOUR WORKERS SHOES AND YOU’LL SEE HOW SCREWED UP THIS ECONOMY IS!!!!!!!!!!! IT’S NOOOOT THE HOUSING MARKET, BUT THAT IS WHERE ALL THESE POLITICIANS WANT YOU TO BE FOCUSED ON SO THEY CAN KEEP RISING THE PRICES AND TAXES ON EVERYTHING ELSE!!!!!!!!!!!! GOOD LUCK TO ALL REAL ESTATE PERSONS, I’LL SEE YOU AT THE LOCAL GROCERY STORES BAGGING MY STUFF AT SOME POINT WHILE I’M PAYING WITH MY FOOD STAMPS!!!!!!!!!!!!!!!!!!!!!!
Barry Cunningham, you are an idiot. Your smart ass attitude is part of the problem. I was on the radio for 20 years, and I know how easy it is to say anything you feel like. But it is irresponsible “reporting” like yours that is contributing to the current market situation. MEDIA HYPE.
Tell me this, what was the temperature in America today? The actual temperature on the thermometer today in the United States of America? The answer is “it depends where you are.” So when so-called news reports come out and project doom and gloom, that is based on averages. Some markets will do better and some will do worse.
But to say that ALL markets are in the tank is irresponsible and unconscionable. It is similar to yelling “FIRE” in a crowded theater or inciting a riot. You need to check your smug attitude at the door, if you wish to be considered a trusted source for real estate information. At current, Real Estate Radio sounds more like the Enquirer than the Wall Street Journal.
FYI- the term you used (”s#&t the bed”) is not an accepted real estate term. Nor is it a journalistic term. It is a term used by uneducated people who do not have the intelligence to express themselves with socially accepted commentary.
The poster of this blog entry is a Broker/Owner in Central Florida, a real estate professional with lots of little letters after his name.
While it is true the real estate market is no longer spiraling upward like a rocket shot out of Cape Kennedy. The hardworking, patient realtor can still earn an income. No there is a major decrease in his earnings compared to a few years ago, but maybe it’s time to make comparisons. What is it like for the roofer, who has to stand up on the roof in the sweltering heat and feel the hot sun beating down on his, probably, sunburned body. Oh yeah, how do you think it feels, when that melted tar splatters and comes into contact, with his skin. As realtors, do we really have it all that bad. Life is circular, there are good times and there are bad times. Without good times we couldn’t have bad and without bad times we couldn’t have good. The tide will turn and we’ll see the market come back, but there are some very important things, that must happen first. Here in Miami, where pricing on housing has dropped we are still witnessing alot of construction. As we remember from, when we were in school, value is determined by supply and demand. We need to stop building housing, our supply is far greater, than our demand. As soon as the overabundance of available properties disappears we’ll see the market start to return. Then we need to get a grip on our economy. The rising cost of gas at the pumps has caused almost everything around us to increase in price. Remember trucks are used to deliver groceries to the stores, etc. Remember this is a trickle down effect.
Realtors have to remain calm, continue to work at budgetting their money, stay informed on the market, this will allow them to better be able to counsel their clients. People want to deal with honest and informed professionals. They need to use a little more creativity, when selling a property. Offer some different type of buyers incentive. And finally stop sitting back and talking about how bad the market is roll up your sleeves and do something about it.
Harry “The King” Koenig
I think Frank lives in one of the “greedy” markets I had previously mentioned. Hey Frank, what’s the average sale price in your market? What are the annual property taxes for say, an 1,800 square foot home with 4/2.5. Maybe if your market prices were stable, and weren’t driven up at astronomical amounts by Realtors, homeowners, and builders, then you wouldn’t be driven out of the business.
Greenville, SC, which is my market, is consistently below the national unemployment rate and crime rates are well below national average. We also have the absolute lowest foreclosure rate in any of the top 100 markets based on the most recent report.
The median price of an existing single-family home in my market is $174,900. What does $174,900 get you? How about a 2,300 square foot home, 3/2.5 + bonus, less than 10 years old, on .44 acre cul-de-sac lot, all hardwoods on the main floor, rocking chair front porch, and a large deck? That’s what you’d get in my market, and the annual property taxes are $1,073 after just having been lowered by South Carolina property tax reform.
Interesting how housing is less affordable in blue states?!?!? I thought Democrats were helping the working man? How does it help the working man if you send his property taxes and other taxes through the roof to pay for some program. Florida, which is basically New New York, is definitely one of these greedy markets. And yes, you’d have to be on crack to buy a house in Florida right now.
I’m generally in agreement with most of the posters here.
Frank, I sympathize with your plight. Florida is one of those places in the country that has taken massive casualties as a result of the boom market and, in essence, you are right when you are talking about the average wage earner in Florida. That whole market was driven by speculators, carpetbaggers and non-Floridians looking for pieces of Florida gold. For you, it’s about where you live. For most of them, it was about where they took vacations.
I think that this is further proof that the market is definitely very localized. I’m in the Chicago area and this situation has not affected us in the ways it has in other parts of the country. Being in a robust metropolitan area with a solid economy and lots of jobs has really benefitted our market. Similarly, the same goes for Seattle and a variety of other areas that have bucked the trend. And let’s not even get started on Manhattan. New York, by its very nature, would buck any negative real estate trend unless we had another devastating crash on the level of the Great Depression.
I’ve felt the crunch in my residential business, but as an agent/broker for the last 10 years, that’s just lead to adaptation and modification of direction for me. I’ve been focusing on larger investor clients as well as commercial and industrial buyers and it’s been working. Then again, I was one of the few agents in my market that was always reccomending the purchase of small multi-unit investments to my buyers because I knew the bad times were coming and, as soon as they did, rents would go up and small apartment buildings that were once priced over cashflow would suddenly become self sustaining.
That is where the market correction will really take place and it will be a market specific thing. If you can still get a relatively cheap apartment in a specific locale and the housing prices would significantly add to your monthly outflow for the simple “privilege” of ownership, then ownership fails to be attractive. It’s the point that rents come in line with the cost of ownership that buying becomes attractive. It is a pretty simple concept. If it costs, relatively speaking, the same to own versus rent then why would you rent? If it costs significantly less to rent than it does to own, then why would you buy? In our area, particularly with the foreclosures and hesitant buyers now ratcheting up the renter pool, landlords have shown no mercy in charging full market price. When we’ve reached a certain threshold here, (which I believe will be soon), the buyers will be back in force as long as the rates stay stable; as long as the relative cost of buying is as or more attractive than renting.
No one benefits if the banks aren’t lending money and for the residential buyers I’ve been working with lately, who qualify under the tightened lending standards, the banks are bending over backwards to get loans for these people. I look at that as a good sign as well.
So yes, some areas may correct hard, but I would think it would correlate heavily to the relative rental rate and tennant capacity and once the right threshold is reached the buyers will be out.
Statistically, real estate is not a losing game. I’m not putting out a “going out of business” sign, I’m expanding and diversifying and I’m going to stick it out.
There is a light at the end of the tunnel folks and it is not a frieght train!
Edit to previous: “And yes, you’d have to be on crack to buy a house in certain parts of Florida right now.”
PS - Keep sending me your “half-backs”, my business was up 26% in 2007!
I am a Realtor in the Detroit suburban area~it is interesting reading the different comments on what Realtors are experiencing thru out the country. However Michigan is in a single state recession-foreclosures and short sales are the way of the world here and they are not going away any time soon. Therefore as a Realtor its time to stop blaming the economy and the “democrates for some” and switch gears and jump in. Rentals are the new supply and demand now. Buy one yourself if you can and join the new investment world. Heck with Stocks and bonds-invest in realestate. Unfortuneately someones misfortune is anothers gain. Work with your clients and educate them on what we know-they will continue coming back to us like puppies for food. We need to stop worrying about the future and invest in what today hands us! Thats just my humble opinion here in Michigan~
Every thing sounds so discouraging for 2008. Let me suggest to all who are suffering in certain market, send your clients to Jackson TN. We’re growing and from what it appears, on our way to breaking last years record in home sales both existing and new. I really feel for the agent who said a Reg Nurse makes $15.00 an hour, either you are looking thru dirty glasses or do not or cannot get accurate information on your arrea work force and the prevailing wages. All I can say to jim is call 20/20 or the Todays story, They like to make big headlines with bad news.
I built my Florida home by hand, cutting red cedar trees ,milling them [ six years of time]. The alachua county tax appraiser jumped our tax’s from $1,000 a year to $5,500. Add the insurance jump from $600 to $3,600 we packed up and opened an real estate auction business in Tennessee. Our house price has dropped over $100,000 . I never pulled a mortgage , worked hard every day. The Realtors weve hired say they have no one to show to. Bush bad for our country but GOOD for the auction business. By the time the dust settles FSBO’s and auctioneers will take 80% of the sales. NAR has done nothing but take dues .
I love how George W. Bush is magically responsible for the real estate slump. No blame on mortgage companies, builders driving up prices in certain markets, Realtors overpricing the market, or anything else.
Is George W. Bush the one who sets your property taxes? Did he inflate them by 550%? Is George W. Bush your insurance agent too?
My property taxes decreased (due to SC property tax reform) by 38% in 2007.
I did however have a flat tire about 3 months ago. George W. Bush was definitely responsible for that.
I wish people would start taking responsibility, and stop placing blame on GW. I don’t agree with everything he has done, but I don’t see how in the world he had anything to do with the real estate slump in some markets.
This is a hoot. Very entertaining. Thanks for writing this.
Citizens of Florida got a double ZAP . Jeb Bush did the same to the states economy as his brother did to the federal budget. At the same time they removed state funding for many on going projects. Then counties went after any thing the could tax or charge a fee for. They killed their primary source of income - the building industry. 550% tax increase on a property owned for 30 years ?
WHAT THE HELL, I JUST SAY—— KEEP CHARGING THOSE CREDIT CARDS, DRINKING OVERPRICED IMP. LIQUORS, TAKE EXPENSIVE VACATIONS AND GO FOR BROKE!!!!! EVERYONE ELSE IS!!!!! EVERYONE IS RESPONSIBLE FOR THIS ECONOMY. NOW THAT ALL THE FALSE ECONOMIES ARE BLOWING OVER, NO ONE HAS MONEY AND LOSING THEIR ASSES. GREEEED MY FRIENDS GREEEED!!!!! MONEY IS THE MOST DISGUSTING THING ON EARTH. IT’S TIME TO START READING THE BIBLE FOR WE ARE NEARING THE END!!!! NO ONE ON THIS TOPIC HAS TALKED ABOUT HOW THIS PROBLEM HAS AFFECTED THEIR PARTNERS AND CHILDREN, ONLY ABOUT HOW IT HAS AFFECTED THEIR POCKETS. I SAY HOLD YOUR LOVED ONES DEARLY, CAUSE WHEN THE TIME COMES FOR YOU TO HAND OVER YOUR HOMES AND AUTOMOBILES TO THE BANK FOR NON PAYMENT, YOU’LL FIND YOURSELF UNDER A BRIDGE OR AT A HOMELESS LOCATION WITH THE ONLY PERSONS THAT MIGHT CARE ABOUT YOUR BROKE ASS!!!!!!!!!!!!!!!!!!!!!!
Geez..Frank…might want to take a chill bro…before you have a heart attack…
MR. CUNNINGHAM, I INVENTED CHILL!!!!! I’D RATHER HAVE A HEART ATTACK THAN TAKE THE ULTIMATE PLUNGE. SUICIDE RATE UP 34%!!!! GO FIGURE!!!! THAT IS WHY I SAID NO ONE ON THIS TOPIC HAS TALKED ABOUT THE IMPACT ON THEIR FAMILIES ONLY THEIR POCKETS!!!!!!!!
What impact on my family? I live in a growth market, we bought low, and we could live in our current home forever. We don’t use credit cards for anything, we will never have more than one car payment, and we’re done paying on everything from student loans to the refrigerator we bought when we built our home 2 years ago.
I got into the real estate business 5 years ago when I was 24 years old, and my business has increased by an average of 19% every year since. I know this will level off, and in some years, their may even be a slight hiccup.
The problem I see, even in my market, is that people get into this business thinking it’s easy. Do you know how many times I hear, “it must be great to show houses all the time.” Ha! People don’t take this business seriously, and think the business will just magically come. I laugh at the agents who sit in their offices all day, as if the phone is just gonna ring out of the blue.
Fortunately, before this supposed “slump” is over, the 10% of agents who do 90% of the business will still be here, and many of the rest will not; leaving even more business for us in the 10%. Record numbers of people were entering this business, and I’m sure enrollment in real estate classes has dropped. Good.
Good lord have mercy…. Frank… I agree with Barry…. you need to calm down… or are you what is lovingly described as a “flamer”? Believe me Frank, talking about pocket books is talking about the impact on our families… I work hard every day so that I don’t have to go back to the days when I took my small daughter to the laundromat in a red wagon piled high with dirty clothes cause we couldn’t afford one car let alone two… but, I am a REALTOR and a good one and have saved my money and worked hard… and I AM going to be one of the few that hangs in there.
And… I am going to stop reading all this crap and spending my valuable time on such hate filled posts… what did a good REALTOR ever do to deserve such comments?? Oh… sorry… I guess helping people sell and buy the American Dream is a bad thing.. or maybe the hours and days and weeks I have spent continuing my education to be a good REALTOR makes you mad… or maybe its what I get paid to put and keep a sale together. Gosh… if you saw what I really make after all my expenses… (EXPENSES… not frills and diamond rings…) maybe you would give me some credit for even staying in the business and THANK ME …. heaven forbid…
I sure didn’t hold a gun to anybodies head to buy a house and the people that REALLY made money in 2005 where the sellers…. and the forgotten homeowners who contributed the most to this ridiculous state of affairs were the ones that kept their homes refinanced, took out all their equity, spent it and now can’t sell for what their home is worth… but they forget that they GOT THEIR EQUITY and they spent every last dime.. they spent it on foolish things that have no value.. they didn’t invest it in their future or save for ANYTHING…. and now they are crying and blaming REALTORS and the banks and the appraisers… what the hell is with that???
So… Frank… take your gloom and doom and shove it… We live in the greatest country in the world and we have been through worse times and we’ll see better times and I would suggest we all wake up every day and thank God for what we have… and promise to do everything we can today to keep moving forward and manifest our own destiny and not wait for somebody else to do it for us….
Edited by Barry Johnson - Administration
Frank, please keep in mind a few things.
1. When you type with all capital letters it seems as though you are shouting at us.
2. Please no personal attacks. Everyone can have an opinion.
3. Any citing of statistics or figures must have a link or reference. Please do not state that you read something one time and it said something you cannot back up. Cite your sources if you are going to use them as fact.
Everyone please continue the lively conversation.
Thank you,
Barry Johnson
Dear Frank,
It is difficult to become angry with you because there are so many who feel the same as you. I will say that I am annoyed at some of the statements that you made to Mr. Keegan about South Carolina. “We are one of the most violent states in the union.” I think that you may have inverted the statistic chart your reading from. WHERE ARE YOU GETTING YOUR FACTS FROM? I transplanted from the North East with my wife to Myrtle Beach and we are so comfortable and safe here it is difficult to describe.
My wife is a certified special needs teacher. It is she who informed me of the standardized test scores from Horry County Schools (Myrtle Beach area). I’ll put those numbers up against scores from 98% of the country. The level of education in this area is far better then the area of MA that we migrated from.
As for your obvious dislike of realtors. I challenge you to show me one member of your family and friends that puts in as many hours at their job as I put into mine. I challenge you to show me another profession that puts as much emphasis on ethics as that of your average real estate board in this or no any state for that matter.
In answer to your earlier shot at me. No, I am not on Crack and YES, THIS IS A GREAT TIME TO BUY! I won’t explain this to you again because you don’t want to hear it thus you won’t hear it. Maybe you should open your eyes and look at the big picture. There are those of us who are educated, informed and ethical, who don’t agree with what you are saying/YELLING.
Back to the subject NAR going out of business. As a nine year Real Estate Broker and Auctioneer I think of how many sales we’ve made though MLS [ ONE ] compared to all we have sold though Auction [ 80 plus last year ] . The days of lazy Realtors is coming to an end. With the internet does the public realy need them? No one needs to pay a commission to give a property away at a low price. Auction’s / FSBO’s and For Auction by owner is growing. The NAR isn’t going to make it though this slump with out serious change.
“UNFORTUNATELY AFTER DOING MY RESEARCH, I FIND OUT S.C HAS THE WORST SCHOOLING SYSTEM IN THE NATION!!!”
Well, I don’t think you can compare the low country of South Carolina with the upstate. You should have used an experienced Realtor in the Greenville market, who would have been able to educate you on the Greenville County Schools:
- Students continue to outperform their state counterparts on the SAT, with an average score of 1,000 compared to a state average of 974. The national average is 1,020.
- A high percentage of local seniors take the SAT. 61% of Greenville County School District seniors took the SAT vs. 48% of seniors across the nation.
- About 78 percent of District graduates pursue higher education.
- Ninety-eight percent of high school seniors passed the High School Exit Exam and qualified for a high school diploma.
- 70 Greenville County Schools have either been completely renovated or constructed since 1993.
By the way, 4th grade reading/math levels in SC were ranked 33rd, and FL was ranked 30th. In fact, 4th grade math levels were actually higher in SC than FL. Public school teacher average salaries in South Carolina are 29th ($41,162), while Florida is 31st. South Carolina has the 8th highest attendence rate in the US, while Florida was 20th. Spending per student ranks Florida 44th in the country, while South Carolina ranks 31st.
“NOW THAT THEY’VE LOWERED YOUR TAXES AND DROPPED THEIR REVENUES YOU ARE GUARANTEED THE STUPIDEST KIDS IN THE NATION FOR THE PROSPERING FUTURE OF S.C.”
Get your facts straight. They lowered property taxes on owner-occupant properties, and our state lottery benefits education, just like the Florida Lottery. Not to mention, they increased the sales tax by 1%, but decreased the grocery tax to 3%. In doing so, the people that benefit most are those who keep their primary residence in South Carolina.
“S.C ALSO HAS ONE OF THE HIGHEST ‘VIOLENT CRIME’ RATES IN THE NATION (PARTICULARLY THE SPARTANBURG AREA WHICH IS JUST A FEW MINUTES DOWN THE ROAD AND THE WEST SIDE OF DOWNTOWN).”
Again, a good Realtor in Greenville would have been able to tell you that Spartanburg (a few minutes, more like 30 minutes) is much different. In fact the violent crime rate in Greenville was almost 30% lower than Spartanburg in 2006.
“REMEMBER YOU GET WHAT YOU PAY FOR, IF YOU DON’T PAY FOR ANYTHING (LIKE TAXES TO PAY FOR SCHOOLS, ROADS, LIBRARIES, PUBLIC PROGRAMS, POLICE OFFICERS!! ETC.), HOW DO YOU EXPECT TO PROSPER IN THAT AREA.”
How do we expect to prosper? If I’m not mistaken, people are leaving Florida (or trying to in many cases) for the Carolinas. In fact, Expansion Management Magazine named Greenville, SC the 8th best market in the entire country, where business owners should consider relocation or expansion. I think Greenville is prospering just fine with BMW North America, Michelin North America, the future I-CAR facility, and the fact that 149 companies currently have either national or regional headquarters in Greenville County.
“ANOTHER THING I CAN’T UNDERSTAND IS WORKING AS A R.E AGENT TO MAKE UNDER $100,000 A YR FOR A 4 MEMBER FAMILY. THAT IS ONLY GOING TO TAKE YOU ON THE ROAD TO NOWHERE. AND THAT IS A WHOLE LOT OF MONEY IN S.C. THE AVG HOME IS $165K. AVG COMM. ON THAT IS WHAT?, $6000 (IF IT IS NOT A SPLIT!!!!) AFTER 3 MONTHS OF LOOKING AND WAITING FOR A BANK APPROVAL!!!!! DEDUCT EXPENSES, TAXES, SELF EMPLOYMENT TAXES, STATE TAXES AND WHAT DOES THAT LEAVE YOU WITH?”
$100,000 per year would make a pretty comfortable living in Greenville when you consider that the cost of living is dramatically lower (i.e. gas is $.26 cheaper on average in SC compared to FL, property taxes are obviously lower). I work for every commission I earn, and as property values continue to rise, so will my commissions. As property values continue to fall in Florida, so will your commissions. I think I’m on the right end of that stick, because I think your cost of living will continue to rise. By the way, if you can’t do the math on 3% of $165,000, you need help. (PS - it’s $3,950 GCI at 3%) Oh yeah, and my average sale is higher, plus I average 22 transactions per year.
3 months of looking and bank approval??? No wonder you’re quitting the business. If it takes you 3 months to find your buyer a house in a hot market, then you really don’t belong here. I have 4 closings in January (negotiated, inspected, and ready to close), 2 of which are buyers. I had not met or talked to either of these buyers prior to December 15th. For example: Received a call from a buyer on January 3rd, showed them houses January 5th, wrote an offer January 5th, house inspected on January 8th, appraisal happening January 14th, closing January 22nd. Obviously that was pretty fast, but 3 months…ha…maybe once every 5 buyers, if that.
OK, Self-employment taxes, now I really know why you’re leaving the business. I haven’t paid those since I was 25. S-corp, my friend, S-corp. Self-employment tax, ha, you made laugh out loud.
“OH YEAH AND BACK TO THE FAMILY PART, HOW ARE THE STUPID NON EDUCATED AND LONELY WIFE TAKING IT BACK AT YOUR FOREVER VALUED AT $150,000 HOME.”
First of all, my son is only 1, so he hasn’t gotten there yet. Lonely wife, I think not. Work smarter, not harder. Forever valued $150,000 home? Actually, my home was a lot more than $150,000, not to mention the fact that the appreciation rate in Greater Greenville has averaged 2.8% per year over the past 5 years. In my case, I personally think that the $18,000 my home has appreciated (based on the average) in the past 2.5 years is very reasonable. Quite honestly, based on the most recent CMA I performed for my house a month ago, it’s more like $27,000 in appreciation with an average selling time of 41 days.
You can add these sources if you’d like:
School information:
National Education Association (www.nea.org)
http://www.greenville.k12.sc.us
Crime:
South Carolina Law Enforcement Division (www.sled.sc.gov)
Company/Business Environment Information:
Expansion Management Magazine (www.expansionmanagement.com)
Greenville Economic Development Center (www.greenvilleeconomicdevelopment.com)
I-CAR (www.clemson.edu/autoresearch/)
Dear Col E.G. Murray
I could not agree with you more. If NAR does not make some dramatic changes soon than the face of the real estate industry will change. They are currently Not supporting the troops the way they should.
As for the LAZY realtor, again I AGREE. Take yourself for example you are an agent/broker that has only sold one off the MLS. Then I put to you that you are a lazy agent that probably does need to move on. Even a blind squirrel will find more nuts than that if they look hard enough.
On the topic of auctions. I am a fan. I enjoy attending all kinds of auctions. In fact our office tracks the real estate auctions in this area. Yes, there did seem to be more real estate actions in 2007 then there were in 2006. On average they seem to be selling the properties about 27% below what the comps are for the give property. Add to that the 10% to 13% buyers premium. The fact is most of the real estate auctions have a reserve on them that is right around what a full list price would have them at. I.E. most of them don’t sell. The ones that are absolute are generally distressed property that require so much work that it would be less expensive to buy a property from a realtor in the work place. (Not you because buy your own admission your LAZY.)
The bottom line is the average auctioneer will make twice the commission for a fraction of the work and generally not get the job done on average.
As for FSBO’s they don’t seem to be a threat in this area. Some will list there home for a lot less then they could have made if they had a realtor (Those sell quick). Some will list there home for a lot more than the comparable home just down the street that selling for a lot less and that FSBO will just take a long time to become discouraged. There are some FSBO’s that will spend the money it takes to advertise it properly, but in the long run it would have been cheaper for them to use a realtor as well.
As a final thought, good luck with your business. You do provide a need service. However you are going to have to do a lot better convincing me and the rest of the NON LAZY realtor’s that yours is the better way.
Kudos to Cameron.. though she NEEDS none! She’s got the message right! Also, I agree with you Col… serious change is due and I think “laziness” is a key word if I may be so bold.
Whom are the banks turning to , Realtors or Auctioneers ? Like it or not.
Obviously the banks are turning to auction, it’s the quickest way to DUMP properties. Who are the homeowners looking to sell their homes turning towards? The market is obviously going to become stable in the unstable markets at some point, and then what will happen to the auction business in those markets? Basically, your boom time is now, when the boom time for Realtors has passed for now. Everything is a cycle.
By the way, I read back through a comment of yours. You said you had that the home you built in Florida had lost $100,000? Since when? You also said that you built it 30 years ago. How much has it appreciated in 30 years, compared to the $100,000 you lost? Was your home really ever WORTH $100,000 more than it currently is? What establishes a home’s value?
This business is supply and demand, just like everything else. The demand for Florida has shrunk, causing property values to decline. Guess you should have sold when demand was at its peak, isn’t that the goal anyway?
I had a client move from Orange County, CA about 3 years ago. He purchased his home 8 years prior for $270,000. In 8 years time, he put it on the market, and 48 hours later, sold it for $625,000. He took his money, and got the heck out of California. He purchased a larger, better quality home here, and still had $225,000 left in the bank.
What made his home in California appreciate $355,000 in 8 years time? Was it demand, wildfires, earthquakes, power outages, or mudslides?
Is it any surprise that foreclosures have gone through the roof in this country, and will it be any surprise when another real estate bubble happens in the future? No.
I don’t think Realtors are going to be irrelevant. Bill Gates said something to that effect something like 8 years ago and he pointed to the internet as being the death nail, and it hasn’t happened. Realtors have adapted and use technology to their advantage, (at least the smart ones do). NAR still has one of the strongest lobbies in Washington. We provide an important service to people and, sadly, our collective reputations have gone the way of used car salesmen BECAUSE of the boom market. We had way too many greedy, unethical and inexperienced people get into the business who otherwise wouldn’t have had it not been for the promises of riches.
That said, those people are the ones going out of business. Those will be the people packing it up and, perhaps, putting their licenses with holding companies until the next boom market.
No offense, but I don’t see the auction market taking the place of Realtors any time soon. Because of the default rate, banks are turning to Realtors for BPO’s on properties, not auction houses. In fact, auctioned properties carry a much higher commission (to the auction house) than brokered properties do, sometimes upwards of 7-10% of the sold price. And to participate in the auction suggests you have the money to do so. The average American, outside of e-Bay is not an auction person. They certainly might take issue with buying a home, without an inspection, taking it “as is” with no idea of what they are getting into, simply because they got a “deal” on it at auction. It’s all relative.
To maintain the market, the banks want Realtors to sell the properties as the first line, NOT auction houses. Say you have a neighborhood where the average home is valued at 500k. Now say there’s been even a 20% price recession. Wouldn’t it benefit everyone in the neighborhood and the bank to do a short sale, (of say 25-30% off that 500k value), and maintain the relative stability of values in the area rather than radically skew everything by selling something at auction for say, 50% of the last appraised value? If a home in a 500k area suddenly gets auctioned off for 250k, guess what? Everyone else’s values are adversely affected and, depending on the situations of the individuals in the surrounding homes, we could be talking about an entire neighborhood that is upside down on their loans. If all those people walk away and a trend starts we’ll see the beginning of a greater economic collapse.
Auctions, in my opinion, work well in super depressed markets, (ie blighted areas where investment opportunities exist), or super hot markets where, quite often, the bidders will foolishly outbid each other for the sake of ego and “winning.”
And what about that 10% commission? On a house that’s 250k the commission could be 25k, about the same a Realtor would charge to sell a home priced at 500k.
How does that make sense?
I owned the property 30 years. The main house was finished in 2000 and an addittion added in 04. 2352 sq ft on 5 acres with 5 car shop and parking for my Silver Eagle. We had an appraisal done July 05 at 365K . it is currently on the market at 265k . There is a 4,000 acre timber tract in the front yard under a 99 year lease. I would have taken it to auction but location and visability doesn’t make it a perfect canidate - yes auctioneers pick and choose thier sales. We do return to Florida often for auctions. The Main difference’s between auction and MLS sales are that Auctioneers require 1] Advanced fees for advertising and marketing upfront from the sellers 2] Charge a buyers premium to the sellers. Every market is different as in the loss in Florida is a close match to the raise in value of the 42 acres we purchased in 06 in Tennessee. As to the comment above calling me lazy - we specialized in buying distress , rehabbing and resale. It paid better. Think you can keep up bring on your tools
I’ve been in and out of this blog between emailing & appointments… very entertaining, I must say. Back to BC’s article, NAR has been known to have semi-unreliable stats, but take them for what they are… forecasts, predictions, estimates! Make sure to tell your clients to whom you send these stats that they are only ESTIMATES and one can never really know what the future holds. BC wrote this to make some noise as do all writers on the scene: write for reaction. Boy, what a reaction. I am disappointed not seeing more grounded/level-headed response and analysis of our market and our industry. Everyone who writes in seems to be “bashing” each other rather than responding with sincerity and careful analysis to the issue at hand: our currently uncertain real estate market.
I agree with Rick in saying REALTORS will not become irrelavent. The simple truth is consumers WANT help. They take a risk with every product or service they buy. They want a good deal, they want information and they want guarantee.
Those consumers that are loyal to us REALTORs, like us for who we are and/or what we do for them, like in any industry. My clients use me because I’m likeable, hard-working, go over and above what other REALTORs might do - certainly am not lazy and maybe even do too much at times according to some, and always let them know they’re my #1 priority. There are some people who want this, and some people who don’t. Remember, there are those out there floundering, not sure what to do first or next, those without the time to find the resources or drive around neighborhoods. “Find them” has been my mantra.
Our industry is a CONSULTING industry and it is our duty to remind our clients and prospects of this service and that all the statistics and market updates we can get our hands on are only estimates. Remind them we can give them consulting on every step of the process to help them find that great deal and analyze on a small scale (per house they find, per neighborhood/subarea). Keep it simple… home values are down, so what? So, we need put more emphasis on Comparative Market Analysis for the neighborhoods you like (do the extra work, let them know what you did for them and your clients will love you for it). Unfortunately, another persons loss is anothers gain. Letting them know how and where they can buy *more home for the money*, always perks my clients interest. This is a goldmine of a time right now for buyers. They are our key to regaining the markets in decline. Stimulating and guiding their interest in buying property in these markets is a great business focus.
Our industry will always experience ups and downs and so will our individual businesses. Cameron is right, this is not an easy business. Thank goodness for the people leaving the industry now, less competition and possibly less of those who make REALTORs look bad… the worst representative of our industry is the one who is desparate for business and with no heart left in it.
90% of my business is buyers and referral based after only 2.5 years in the industry. It’s been a great time to buy in beautiful Colorado!
P.S. Not yelling with the caps just trying to emphasize certain words.
OK. OK. The quote of 2007, “Don’t taze me, Bro” has just been replaced with the quote of 2008. “Geez….might want to take a chill, Bro”. ROTFL…can’t stop laughing!!! What great discourse here.
This is to the guy to likes to CAP at people, if everyone is to think like you then this country will be in BIG TROUBLE. Welfare, food stamps, Sec 8, medicaid, etc….and soon nobody wants to work, and be like you and live like you??!!!?? Come on my dear fellow ex-agent, get a grip, you’re in the wrong profession, move on. If it makes any constellation, when you’re sitting in your Sec 8 home, buying groceries with your Food Stamps, paying for that toothpaste with your Welfare, seeing a family doctor with your Medicaid, thank us Realtors (not to mention the rest of the hard working people) for helping you with our taxed dollars!!! ENJOY!!!
Great Commnets everyone. Frank you are obviously a very angry guy. Not sure you can point the finger at any one variable for the demise of most agents. To me it was simply the perfect storm.
From here it’s no longer a rescue mission, it is solely a recovery mission. Those who will survive will need to seek shelter in the form of change, while the others will be zipped up in body bags and taken away to work at Walmart.
Check out today’s post for support.
In any event, thank you all for your continued commentary.
JL, thanks for your kudos, but Cameron is a guy’s name too!
I would agree that the economists at NAR do not have a complete handle on when the market will be crazy again with prices skyrocketing. I personally never have liked those kinds of markets because they give a false sense of value to people.
This last round produced the greediest bunch of sellers I’ve seen in my 21 years of real estate. But buyers were jumping on the band wagon because the greed bug bit them as well. HOW CAN YOUR HOME MAKE MORE MONEY EVERY YEAR THAN YOU DO? Fear gripped some of the buyers because they were afraid that they would never own a home.
It did not take a rocket science degree to see that we were on a collision course in real estate. Every time the market would start to become sane, the banks would come up with another loan program that continued to fuel the frenzy. THEN…ALONG CAME THE REAL CULPRITS WHO COMMITTED LENDER FRAUD…falsifying documents, cheating their friends & even relatives, lying to people within their own ethnic communities to misuse their trust to make a buck!
Unfortunately, it IS difficult to determine when things will iron out for America. Some people are all out afraid that we will go into a serious recession. I am a very positive person, but my clients need me to be realistic as well. Real estate is LOCAL. Just like the weather, there are always pockets that are warmer/colder than other pockets right next door.
I was disappointed with California Association of Realtors in 2006 when they projected soft landing in 2007. I kept thinking about all the loans from 2005 that were to reset in 2007. However, I don’t think that we should cast a lot of criticism stones at people who were wrong. I also think that we should not sensationalize the errors as well. I grew up in a time when my mother said that you could be honest and still be polite.
Unfortunately, much like the Savings & Loan debacle, the American people will probably pull the banks out of the mess that they themselves have made with the Sub Prime loan products. Buyers need to take some responsibility for their own lack of knowledge. They need to verify information and not blindly trust lenders. They need to seek Realtors who will take the time to educate themselves first and then educate their clients in turn.
This mess too will pass. Much of America is in a REO/Short Sale market. When prices come down enough for an investor to get break even cashflow with at least 20% down, we will see true value. Local economies can drive prices higher where they make sense. Someone in another comment said that there are many hourly workers who will never be able to buy. That will always be true.
Many would be “Investors” came into the marketplaces with little money down, driving prices unrealistically high. They bought to “flip” houses at the wrong time. Sensational “Investors Classes” were being given to pull people into the feeding frenzy who will never be true investors. They, just like the course presenters, were looking for the quick buck at the expense of others.
We can see from where we are, I hope, that the greed bug can bring about events like stopping the entire economy of France (who invested in sub primes) for an entire day in 2007. It may take the U.S. economy into the greatest recession since the Great Depression. Hopefully people will learn this time. They obviously did not learn from what happened in the 90’s because they helped to create our current potential disaster.
Let’s all begin the clean up and remember not to fall prey to hype, trying to make a quick buck. My mother told me when I was a child…”Your chickens always come home to roost.” WE CAN CLEAN UP AND MAKE IT A BETTER WORLD BY PRACTICING THE TRUE GOLDEN RULE: “Do unto others as you would have them do unto you.” Make a difference in 2008!
[…] January 8, 2008, there was a blog posting here that caused quite the firestorm. In that post it was stated that it sure seemed to us like the National Association of Realtors had […]
this guy is an Idiot
[…] going to do? Earlier this year, we wrote what was viewed as an inflammatory article announcing the NAR Going Out Of Business Sale. Doesn’t sound too far fetched anymore does […]
[…] going to do? Earlier this year, we wrote what was viewed as an inflammatory article announcing the NAR Going Out Of Business Sale. Doesn’t sound too far fetched anymore does […]
Your headline is all doom in your head. A market
can be whatever you make it. You seem to think
the glass is half empty and on its side!!. I think the
glass is half full and has plenty of room for a fill
up. Why don’t you just give up and move out of
the way for those of us who will be aroung in 2+
years. Are you sure you want to get up in the
Morning ??? TM
hey Tom…you have it all wrong..while it may be bad for many, and since this article was written it certainly has become such..the real professional knows this is the time fortunes are made. We love the opportunities in this market!