A reader emailed me recently to remind me of this amusing document published by the National Association of Realtors in 2006: Home Price Analysis for Seattle-Tacoma-Bellevue (pdf).
Quoting:
With home prices rising strongly in most parts of the country, there has been widespread media coverage on the possibility of a housing market bust. A thorough analysis of the Seattle-Tacoma-Bellevue metro market, as detailed below, reveals that there is little danger of this. In fact, the local housing market is in excellent shape with a potential for significant housing equity gains, particularly for homebuyers who plan to remain in their house for the long run.
The amusing part about this is that by the time this was published in July 2006, home prices had peaked across much of the country, and were by no means “rising strongly” any more. But the NAR was never one to let facts get in the way of good propoganda.
Housing equity will most likely continue to accumulate to local homeowners. The equity gains under three price growth scenarios are presented below. One scenario assumes a historical conservative price appreciation of 1.5% above consumer price index inflation. With most credible inflation forecasts pegged at 2.5%, home prices can expect to rise by 4% per year under normal circumstances. The two other scenarios assume slightly below (1.5%) and slightly above (6.5%) the normal rate of appreciation.
Heh, I love how the doomsday scenario in their “analysis” is a 1.5% rate of price appreciation. Oops.
I also especially enjoyed the obligitory Seattle is Special addition near the end:
Many non-quantifiable factors could be important for this metro market in determining home prices. Access to cultural life, the quality of museums, nearby local and national parks, water views, exclusive neighborhoods, weather, the international airport, city vibrancy, restaurants, and a host of other non-quantifiable factors could have an important influence on the overall pricing.
“Non-quantifiable factors.” Classic! Here’s what I had to say about their malarkey at the time:
All in all, what we have here is another disappointing showing from the NAR. If they’re going to have any chance of convincing a thinking person of a strong, resilient Seattle housing market, they’re going to have to come up with something more than this steaming pile of tired catchphrases and misleading statistics.
As it became obvious to everyone that home prices were falling like a rock, the NAR did try to come up with more, lobbing up a Hail Mary pass in 2008 with a “Building Wealth” campaign that desperately tried to convince people that “every market’s different,” and somehow your market would be special and immune.
This of course prompted me to produce my own parody version.
So how’s that “savings plan” working out for all the people who bought this BS from the NAR in 2006 and 2008?
00
Only a RedFin employee would be doing a weekly body slam on the traditional realtor. Pretty funny though. You should do a post on the best David Lereah quotes as he steered the NAR and the public upon the rocks.
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Red Fin IS going the way of the “traditional realtor” by giving less and less back to buyers, ever increasing office minimums of 6000+ per transaction, and still charging 1.5% to list.
I bet you could make 10 calls to local “Traditional” Agents in your area that are “desk fee” and 1/2 will give you the same deal OR BETTER if you assist them in finding your home. As for 1.5%-3% to LIST?? Thats going out the window first. You can Bank on That! Sheer insanity!!
The Buffet is coming to an end! But, unfortuantely there is a VERY long line…………..So Pegasus I wouldn’t say this comes from a Red Fin employee slamming a traditional Realtor…The INSANE fees of both are quickly coming together!
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RE: ray pepper @ 2 –
Well, I think consumers should get something for the money they spend. Probably 80% of Real Estate agents bring absolutely nothing to a transaction, or are a hinderance.
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RE: ray pepper @ 2 –
I wouldn’t say that the body slamming is a result of Tim being a RedFin employee. He would’ve posted the same thing months or years before joining RedFin.
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RE: Ira Sacharoff @ 4 – Pretty sure it was a joke.
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By Pegasus @ 1:
Just pointing out the obvious that since it’s his blog he can do pretty much what he wants to.
Doesn’t change the perception that during the run up it was always “a great time to buy.” I still hear that from many of the realtors I interact with in other venues.
I am not bashing realtors, many of whom bring real value to the table. Same said for attorneys.
I think it is true of many professions, including mine, that when your best tool is a hammer, everything tends to look like a nail. Human nature?
Best,
Rick
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RE: ray pepper @ 2 –
Come on Ray- Redfin has those nifty little bar graphs over in the upper right hand corner that show you realtor ratings from satisfied consumers. Do you offer that? Plus many of their realtors are hot- and violent love always sells. They aren’t looking for listings, they’re looking for buyers. They’ll let you come up with the listing, at a discount. It’s a clever approach to a limited amount of the market, but not the future for all. Better than Zillow, but there’s still room for a grand new model.
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By The Tim @ 5:
It was and I knew Ray would show up after I posted it. However I was really hoping for some other weekend topic that would not be another endless marathon of real estate “professionals” bashing and stalking each other. The consumers unless they are heavily sedated have already figured out who the villains are and are better off watching “Swamp People” gutting alligators.
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By Pegasus @ 8:
Good Stuff! I like Swamp People but am sad that we can’t get the current season streaming on Netflix.
Might I suggest “Warehouse 13″ on SyFy?
This should go on open thread but it is Fri and I am beat.
Rick
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I love Fridays.
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RE: Pegasus @ 8 –
In season 3 of Swamp People, Realtors are going to dropped into the Louisiana swamplands, and will be hunted by the Swamp People, but will be left alone by the alligators. Professional courtesy.
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I think the MBA’s over at the NAR believe 80% of people are stupid. Therefore, there’s no reason to convince thinking people of anything. As long as they sell homes to gullible idiots, their business model will flourish.
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“I think the MBA’s over at the NAR believe 80% of people are stupid. ”
In my experience, 80% might be an underestimate. Too bad it takes a little while to figure out which group someone belongs to when you first meet them.
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RE: Ira Sacharoff @ 11 –
I heard they’re going to use realtors/bankers as bait next season. Of course, they’ll first have to drench them in Joe’s secret sauce…all the while Troy sings, ‘yeah yeah yeah yeah.’
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By Dirty_Renter @ 14:
Alligator One to Alligator Two: Didn’t that banker taste a little too rich?
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