National Association of Realtors Out of Touch with Reality

Calendar October 2, 2007 | Posted by Jorge

Thanks to Susan for the link! I’ve been looking for this clip for a couple of days now.

It’s amazing to see realtors out of touch with the economy. I understand that folks have jobs and need those jobs to feed their families and to survive, but there has to be some admission, any admission, that things aren’t well with the US economy. To see the NAR out of touch with reality concerns me and should concern every last person out there looking to buy a home. A press release by the NAR a day before the video above was released regarding the housing market.

NAR President Pat V. Combs, from Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt, said the good news is that the mortgage picture is improving. “Mortgage interest rates have been declining and loan availability is improving,” she said. “Movements to enhance the FHA loan program and to raise the limits for conventional financing could provide additional relief, and it looks like the worse of the mortgage availability problem is behind us.

“The abundant choice of homes is permitting buyers to better negotiate price and terms. There are good opportunities in the market now, especially for first-time buyers.”

Mortgage rates have not been declining as some thought with the FOMC interest rate cut. Housing prices have been in an almost free fall for a few months now. First time home buyers, such as myself one day, will lose money before closing on their new purchases is complete. Taking a $20k to $30k hit the first year of home ownership isn’t just a loss of asset value, it’s demoralizing to the buyers. I understand that families need shelter but I’d be hard pressed to leave my rental unit until housing prices stabilize and I could afford to buy my own home. The NAR needs to stop looking after themselves and looking after the home buyers they represent.

Category Categories: Jim Cramer, Market Pulse | Tag Tags: | Comments Comments

  • Tim
    Actually the NAR does not represent home buyers in general, they normally represent the sellers.
  • blm03
    I have to somewhat disagree with you. My house has increase around $20,000 in the last two years while the economy stunk. I think it depends where you are trying to buy a house.
  • Tim: Yeah I understand that. It feels as if they're giving buyers the perception that everything's alright when it all actuality it isn't.

    Lisa: Oh of course. Not everywhere has been affected by the housing market decline. I'm currently in Florida and the housing market here is abysmal. I'm curious. What part of the country do you live in Lisa?

    Thanks for visiting!
  • While NAR is the cheerleader for the real estate industry, and as cheerleaders, they know THE LEAST about real estate economic cycles, I don't know if I Cramer has it right either.

    I agree with his conclusion, but I feel he has not reached it propertly. He says he's talked to home builder who say business is bad. Home builders are another bunch who overbuild and buy way more land than they need at the top of real estate cycles.

    They've been getting it wrong for years and if they couldn't see the peak in housing when 25% of all home purchases were 2nd homes or investment homes & 74% of purchases in California were adjustable mortgages, they probably won't know a bottom either.

    There is no way we'll see a bottom next year. The fed is reducing interest rates and this will help a soft landing. That is if you mean a slow, drawn out correction lasting several years instead of a quick, deep correction. And it will come at the expense of a deep recession.
  • WBL:

    What if the Fed were to cut rates as deep as they did this past meeting? Or is a recession at this point unavoidable? I hate to say it but I'm somewhat glad this is happening now from my personal benefit. I'll be in a great position to purchase a home when I graduate within the next year or so. I do feel awful for the hardworking families who either can't afford to pay for their homes. It's never a great thing to see folks lose that "American Dream." I don't feel bad for those house flippers on TLC and the other home channels. They took a chance. They should have known the bubble was going to burst soon.
  • check out this link: http://www.mises.org/story/2728

    I hope there's a recession too. It doesn't make sense for the avg family to pay 60%+ of its income for housing in SoCal.

    And everyone makes money in a boom cycle, but you have to be pretty smart to make money in a bust cycle!
  • Indeed. I've heard of software programmers in San Francisco barely making it on a $70k+ salary living on their own since housing prices (and I would assume rental as well) are so high.

    My officemate told me I had an epiphany once when it came to investing. It's always easier to make money on bad news than on good. I can only imagine investors sitting on the sidelines waiting for the bubble to pop and then immediately scooping up homes left and right at bottomed out prices for resale.

    Thanks for the link by the way. Great article!
  • blm03
    I like in Chicago suburb in Illinois.
  • blm03
    I mean I live
  • More tripe from the media.
  • i owned 3 modest properties in SoCal, which of which I sold at the peak in summer 2005.

    I now rent, happy to see prices falling to below what I "bought" the properties for in in 2003.

    The money went to purchasing 5 properties out of state, all with 20% down!

    You get a different perspective when u have your own money at stake, rather than relying on some theorectical info or what you hear from bldrs & agents.
  • This is the trend in the Real estate business. There are time that it is up, there is also the down time.
  • Yeah housing's definitely cyclical. What bothers me is that some folks don't see that and keep promoting it as if nothing's wrong when something is indeed not right.

    Congrats on getting out early AMM. Yeah things are different when you have your own neck on the line. It's similar to paper trading vs. actual trading with stocks. Anyone can paper trade but when it comes to using real cash, the game changes.
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