The Future of Real Estate

The cockeyed optimists of the National Association of Realtors.

By Daniel Gross | Newsweek Web Exclusive
Dec 11, 2007 | Updated: 6:04  p.m. ET Dec 10, 2007

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  • Posted By: timmymao @ 01/02/2008 1:20:04 PM

    It's obviously not in the NAR's best interests to forecast market conditions unfavorable to their core business. How long would an umbrella seller last if their economist only forecast temperate weather?

    As for the realtor trying to justify their commission, how about charging by the hour like many other professionals?

  • Posted By: angelface @ 12/22/2007 9:58:01 PM

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  • Posted By: billyh_98 @ 12/13/2007 2:31:25 PM

    Unfortunately you are looking at only one side of the equation. During the housing boom there were many people buying homes thinking they would turn around two years later and sell them for a huge profit. Others were financing their homes way beyond their means and now many are losing their homes.

    In the South we have seen tremendous growth. The median home value in the South has gone up over 52.5% since the start of the decade. It is only down 2.8% this year. (Baltimore Sun, October 25, 2007). Why don't you talk about some of these statistics in your article? There are many regions where the market is suffering, but there are others where the market is still doing well in some areas. Many are still making a considerable profit from homes purchase only a few years ago. The potential profit has gone down, but there is still a substantial profit for many.

    As an agent, I will always talk about the positive as well as the negative. I have many clients who are "scared" due to all of the negative articles and reports in the media. The thing which many in the media neglect is the fact that it is a good time to buy. By this I mean, if you have good credit and good income, you should consider purchasing a home. Purchase a home within your means. Put down 10, 20, or 30% if you can. You can usually get some kind of free equity line. Use this equity line for emergencies as your build up your savings again. Buying a home is still a good investment, if you take the time to research your investment. There are some places where it would be best to wait to see what the market will do. There will always be places which fall into this category.

    Will we see some more declines in the future? I am sure we will, but to make blanket statements is not helping anybody. What about the huge gains real estate has made. Every ten years or so the market changes...for better or worse. People who purchased homes before the decline in prices with the idea of keeping their home instead of speculating have benefited. People who purchased homes and then refinanced two or three times taking all of their equity out of their investment are the ones who suffer now, as well as those with ARMs.

  • Posted By: LSD4u2 @ 12/11/2007 5:01:59 PM

    I agree with Spetzen, Spetzen you're doing a heck of job. keep up the good work

  • Posted By: spetzen @ 12/11/2007 11:55:42 AM

    Please help us to understand why no person has identified the National Association of Realtors as one of the main culprits of the housing bubble. Yes, the sub-prime lending brokers had a hand in extending suicidal loans to consumers with rose colored glasses but witnessing the unchecked price gouging by realtors to beef up that 5-6% commision was a travesty. Those commisions were hardly EVER worth the effort put forth by a realtor in such a sellers marketplace. If you even mentioned lowering commisions to 3-4% you were blackballed from the MLS listings and a realtor would not show that home due to the insult and "hardship" and such a low commision would evoke (if you can call making over $2,000 an hour a hardship). If you ask me, any one of the thousands of realtors out there would roll over for a 2% commision these days due to the self inflicted results of their greed. We need checks and balances in the real estate market so that this cycle does not repeat itself again.

    • Posted By: cjohnson_62072 @ 12/11/2007 1:35:46 PM

      Spetzen you are very naive. It sounds like you are one of those people who think that realtors have no expertise and make way to much money for what they do. That is because you don't really know what they do. You have no idea of the expertise and education. When it comes to selling your home we are your marketing arm ( With our money at no risk to you), the sales team, the closer, your decorator, and half the time we are giving advice and doing things for our clients that are not our responsibility. You think every realtor is getting 5%-6%. Okay, subtract the Brokers costs, marketing expenses, gas, phone calls, time doing paperwork, the time assuring our clients disclose correctly and stay out of court, negotiating to the penny and when it doesn't hit the clients expectations, guess who gets asked to cut their commission. You think we did not earn our money in the good market? You have no idea how much time it took to field every call, negotiate 5-6 up to 10 offers. Working with buyers and showing them 30 houses before they actually got one they liked that hadn't sold already. I don't know who you talk to but agents are earning their commissions more now that ever and any agent begging for 2% should not be selling real estate anyway. Why do you think sellers are giving sometimes 4-5% to the agents who brings the buyer. The agents are important!

      As for blaming lenders with suicide loans, I am not a lender but I do know that everyone is searching for the American dream. Everyone wants a bigger house in a bigger neighborhood with better schools and they are willing to do anything to get it. If they don't know the risks, they should have done more research for themselves. We have never seen a market like the one we just came out of and I think we all learned a lesson.

      How come nobody is blaming the consumer who decided to refinance their house and take out all their equity and now they have to refinance out of some teaser loan they excepted and have no money left, their house has gone down and because so many lenders screwed themselves that there is now a credit crunch and they have no money t put down for their new refinance and cannot afford the adjusted payment and now every home is a short-sale or foreclosure.

      Bottom line is we are all probably a little to blame for this. We all tried to make the best of a good market and it turned quickly. Just as all the foreclosure vultures and investors out there trying to pick up properties cheap from desperate banks or desperate sellers.

      We all need each other than ever in the market now. An experts advise is only appreciated when someone needs it. Other times they don't regard them as an expert at all.

  • Posted By: cjohnson_62072 @ 12/11/2007 1:10:48 PM

    Spetzen you are certainly entitled to your opinion. It sounds like you have had a bad experience or possibly a good one where your realtor possibly got your home sold quite quickly therefore not earning their commission in your eyes because it did not take enough hours in your eyes to justify it. Should all businesses be penalized because they did their job in a timely manner? If you tried to sell your home kljjljkljyourself, every agent you may have dealt with would have eaten you alive and resulted in a lower price for your home. Everyone thinks they are a real estate expert until a difficult situation arises, than they want our expertise. Nobody takes into account the time we spend dealing with every agent, every showing, paperwork which in California is tremendous. The time putting it in the MLS, dealing with all of the disclosures, protecting our clients from bad situations and lawsuits. We pay the advertising, spend ousfvfdgr money on gas, flyers, our network and negotiating abilities, every expense that it takes to be a realtor. Stop blaming the agents or the lenders for the market and except what loans the buyers have chosen to take just so they can get into a better neighborhood or school district. Stop blaming the agents and lenders for buyers putting down little to no money and getting an adjustable rate mortgage that has to be refied in 3 years. Everyone wants to blame us but as a realtor, I get more calls now asking for my expertise to save these people from their own situations and I don't get paid for my time dealing with this. It is time to stop blaming any one industry or group for this current market. Real Estate is cyclical. Did everyone forget what the mid 90's were like. Did they think that the market was going to stay like this forever? Realtors are probably underpaid now for the time , marketing and effort it takes to sell a home now. We chose this business, we except the cycles and so should everyone else.

  • Posted By: cjohnson_62072 @ 12/11/2007 1:08:24 PM

    Spetzen you are certainly entitled to your opinion. It sounds like you have had a bad experience or possibly a good one where your realtor possibly got your home sold quite quickly therefore not earning their commission in your eyes because it did not take enough hours in your eyes to justify it. Should all businesses be penalized because they did their job in a timely manner? If you tried to sell your home yourself, every agent you may have dealt with would have eaten you alive and resulted in a lower price for your home. Everyone thinks they are a real estate expert until a difficult situation arises, than they want our expertise. Nobody takes into account the time we spend dealing with every agent, every showing, paperwork which in California is tremendous. The time putting it in the MLS, dealing with all of the disclosures, protecting our clients from bad situations and lawsuits. We pay the advertising, spend our money on gas, flyers, our network and negotiating abilities, every expense that it takes to be a realtor. Stop blaming the agents or the lenders for the market and except what loans the buyers have chosen to take just so they can get into a better neighborhood or school district. Stop blaming the agents and lenders for buyers putting down little to no money and getting an adjustable rate mortgage that has to be refied in 3 years. Everyone wants to blame us but as a realtor, I get more calls now asking for my expertise to save these people from their own situations and I don't get paid for my time dealing with this. It is time to stop blaming any one industry or group for this current market. Real Estate is cyclical. Did everyone forget what the mid 90's were like. Did they think that the market was going to stay like this forever? Realtors are probably underpaid now for the time , marketing and effort it takes to sell a home now. We chose this business, we except the cycles and so should everyone else.

  • Posted By: cjohnson_62072 @ 12/11/2007 1:07:06 PM

    Spetzen you are certainly entitled to your opinion. It sounds like you have had a bad experience or possibly a good one where your realtor possibly got your home sold quite quickly therefore not earning their commission in your eyes because it did not take enough hours in your eyes to justify it. Should all businesses be penalized because they did their job in a timely manner? If you tried to sell your home yourself, every agent you may have dealt with would have eaten you alive and resulted in a lower price for your home. Everyone thinks they are a real estate expert until a difficult situation arises, than they want our expertise. Nobody takes into account the time we spend dealing with every agent, every showing, paperwork which in California is tremendous. The time putting it in the MLS, dealing with all of the disclosures, protecting our clients from bad situations and lawsuits. We pay the advertising, spend our money on gas, flyers, our network and negotiating abilities, every expense that it takes to be a realtor. Stop blaming the agents or the lenders for the market and except what loans the buyers have chosen to take just so they can get into a better neighborhood or school district. Stop blaming the agents and lenders for buyers putting down little to no money and getting an adjustable rate mortgage that has to be refied in 3 years. Everyone wants to blame us but as a realtor, I get more calls now asking for my expertise to save these people from their own situations and I don't get paid for my time dealing with this. It is time to stop blaming any one industry or group for this current market. Real Estate is cyclical. Did everyone forget what the mid 90's were like. Did they think that the market was going to stay like this forever? Realtors are probably underpaid now for the time , marketing and effort it takes to sell a home now. We chose this business, we except the cycles and so should everyone else.

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