It'll likely not be taken care of until the 2008 Congressional Housing Bubble hearings, but I expect some MAJOR changes afoot at the ol' NAR.
This corrupt organization, which of course is a top briber of the past Congress, not only needs a serious disinfecting, I would suggest it needs a disbanding.
Yes, the market might take care of that for us, especially when the MLS is ruled to be anti-competitive or google finally destroys it. You'll also see more courageous real estate clerks (like Osman and Danilo) try to take it down from the inside.
If you have a few minutes, browse this anti-NAR tirade - lots of great info, especially that 1972 mob-like shakedown.
Wouldn't it be fun to mount a protest outside of the next NAR convention? I'm thinking in the style of the 1972 Chicago Democratic convention, or Seattle '99 WTO protest. Gotta be a bit of tear gas to really make a statement these days. And I'd bet there'd plenty of bankrupt homedebtors screwed over by real estate clerks, hungry dues-paying realtors themselves, and the masses of bubble blog readers, to mount a nice anti-NAR campaign soon.
From the anti-NAR report on the Department of Justice website:
Organized real estate is beset with illegality. Despite spending over a trillion dollars a year on homes, consumers don't get what they deserve. Agents are victimized by their trade association, the National Association of Realtors.
The Department of Justice should bring criminal charges against NAR for its 1972 price fixing conspiracy that created the DR formula. New Realtor associations spring up each year and NAR actively makes sure each one is part of the conspiracy. Thus, many criminal acts took place within the statute of limitations. The victimized public should demand an end to these practices.
December 30, 2006
The NAR under fire - "Organized real estate is beset with illegality. The victimized public should demand an end to these (NAR) practices"
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29 comments:
Excellent link keith.
I like this chart. It confirms that prices have been very stable (up to the mid 1970s.
There hasnt been a major correction in real estate for a long time. Isnt it time now?
Hey, the NAR stepped up last month and ran that huge ad campaign about "What a Great Time It Is to Buy a Home!" For untold millions, how successful was it? Does the rank and file membership believe it was a wise use of their dues? Or, rather, should the money have just been sent out as an income supplement to members since the market's been slow?!?
So you mean, a newly built home in 1910 for 1,500 vs a home bought in 1967 for 16,000 is not stable? but price escalation since the 1970's through the 1990's is?
Of course there were RE drops during recessions. I'm not saying there isnt. What I'm talking about is the huge appreciation since the 1970's. Incomes can't keep us with these increases. Isnt this right?
uknowwhoiyam,
Give up man. Someone posted here that in the late 90s there was no appreciation in Silicon Valley when in fact between '95 and '00 the median price in Santa Clara County - middle of Silicon Valley - went up almost 100%.
People here pick and choose statistics and simply ignore anything that doesn't fit into their view of the world.
The NAR is guilty of many crimes, regardless of where the bubble starts.
But much as I hate the NAR, the more productive place to lay the blame is in the system that allowed them to do what they did. To a certain extent you can't blame the NAR for increasing their incomes by encouraging more and more sales at higher and higher prices. The NAR merely acted consistently with the rewards system in which they operated.
We need to change the rewards system through regulation, encouraging competition within the real estate market. This means eliminating the exclusive access of the to the MLS.
Everyone should be able to view, filter and sort all available homes and have access to empirical data that would give them a reasonable indication of the value of a home. If that were the case then this bubble would never have occurred. We need something like an accurate and all-inclusive zillow. This benefits everyone and the NAR is standing in the way.
Paul,
All the info the NAR has is public info, always has been. All sales data is and has always been available at country/city clerk's office.
RE: Original link
Great link. Thanks Keith. Yup, people should read that submissin to the DOJ. When I put together my magnus opus on how the realtors got in the way and hindered me when I was selling via a listing-only-agent and buying on my own I'll send a copy to the lawyers. That experience is really what made real estate shenanigans so personal to me than other asset classes. I don't usually get too worked up about options, stocks, mutual funds, straight cash (non-treasury individual bonds, ESPECIALLY MUNIs are still pretty inefficient). I know there are a load of crooks and middlemen thieves out there in those asset classes but the market place DOES allow me to stay out their way and still conduct my business as I see fit.
Separately, which chart is lauravella talking of as liking it? The chart in the original post is of NAR membership. I can't see an additional one linked to in the 2:39 post.
-K
uknowwhoiyam said: "There is no "huge appreciation" since the 1970s. Since 01/02, yes, it's huge".
Maybe in your neck of the woods homes didnt go up much, but In the 1970's housing prices quadrupled in just the bay area alone because of the new computer industry boom in Silicon Valley, Santa Clara, San Jose and Milpitas.
How can house prices continue to stay inflated for 4 decades (in the bay area) when there are no good paying industry and manufacturing jobs anymore?...forget about the bay area, anywhere for that matter?
The only buiding going on is tract homes and shopping centers paying minimum wages and no benefits.
My mothers house cost her 16K in 1967, today, she can sell it for 525K if she wanted to. The sad thing is she couldnt even afford to buy that same house again just 10 years later in the late 70's.
Separately, which chart is lauravella talking of as liking it? The chart in the original post is of NAR membership. I can't see an additional one linked to in the 2:39 post.
I'm referring to (liking) the chart because its realistic. Anything after the 1970's is inflated prices that dont keep up with income levels, IMO.
Do I have it backwards or what?
Wow, another person here who lives on Planett Glecko. No good jobs in the bay area? You have got to be kidding me.
Not a week goes by that I don't get a call from a recruiter from NorCal and I don't even live there. Just yesterday I got a call from an old colleague of mine who asked me if I know anyone who is looking since he can't find any qualified people. He lives in San Mateo and works for a tech company you've all heard of.
I just don't get this pessimism displayed here. What do you all do for a living, typewritter repair?
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How can house prices continue to stay inflated for 4 decades (in the bay area) when there are no good paying industry and manufacturing jobs anymore?.
6% is like MSRP on a new car. 4% is what the real price is.
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i've never bought or sold a home, but from what i read here and elsewhere the vendor pays a realtor 6% or thereabouts in the US, but only 2 to 2.5% in the UK.
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re: lauravella
I'm referring to (liking) the chart because its realistic. Anything after the 1970's is inflated prices that dont keep up with income levels, IMO
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Ahhhh... You mean a just a chart in its own right, describing some phenomenon not something specific like housing prices,or, as in this case membership of NAR.
I get concerned, suspicious and go the actual data not the picture when so much of the data is so close to zero. It "looks" pretty gradual in the grand scheme of things for sure, a century in this case - and therein lies the problem - the grand scheme of things. So I went to the actual data in the report.
Time MBR growth
1975-2005 275%
1945-1974 523%
1915-1944 433%
I deliberately pull out that spike from 136K to 431K in the space of 1 year from the above as that really did a number on the chart( as an aside, that's the real point of that chart of course - the change in the fees structure of NAR membership).
So, looking at the data NOT the chart,excluding the 1975 spike( and it SHOULD be excluded) membership growth actually SLOWED DOWN in the last 30 years ! What would you have reckoned, looking at the chart ?
Anytime you see a period hugging zero like that - don't trust the picture, go to the data - or ask for rates of change pictures.
-K
sk,
you didn't have much success with the ladies in high school did you? But I'll bet you were quite the hit at the Audio/Visual Club Christmas
Can some one point to any bylaws in any state/county/city where it is stipulated that YOU MUST SELL A HOME using a Realtor?
How about a law that explicitly forbids FSBO?
I like this chart. It confirms that prices have been very stable (up to the mid 1970s.
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Most everything was "stable" up to the mid 1970's. If you dont remember Richard Nixon cancelled the Bretton Woods Monetary system on August 15th 1971. After that money was essentially set loose and its been a fast slide into hell ever since.
re anon 9:12
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you didn't have much success with the ladies in high school did you?
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Heyy.. how did you guess ? Yup, there was a hiccup on that (lack of ) score until I learnt that tearing live rabbits limb from limb was just a stage act and didn't impress the ladies. I changed and the rest is history.
I suppose you haven't learnt that yet.
-K
Then you paud 1% too much. 4% paid by the seller means the buyer's agent gets 1%, the seller (listing) gets 3%. If you didn't use a buyer's agent you could have only paid 1%.
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FlyingMonkeyWarrior said...
4% is what the real price is.
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When I bought my home I used the listing agent as my "Clerk" and ALL SHE GOT was 2%, TOTAL commission. (:
WOW!! Are you dense.
You could have done the same for 1% instead of 2% for the whole transaction if you only used one agent.
Man for smart know it alls you people sure don't know shit.
yes moron and for that deal you paid 2%. You could have only paid 1%.
I'm sorry you are a fucking moron and can't understand.
No one with half a brain owns real estate at any commission morons.
That is my point idiots. All of HP morons listen to me now. You have to hear me.
FMW is not even on this thread, but you all must hear me.
Sorry, but you must listen to reason fucking HP morons.
I know everything about this stuff, morons.
too much. Too much anger to spell check. You must hear me now HP.
I like HP. I like to keep tabs on what the extremists are thinking/doing. If blogs were around back then, who knows, the OKC bombing may have been prevented.
All I can hope for is that the FBI is watching, taking notes and recording IP addresses.
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