I hadn't seen this until this morning when I was trying to figure out the renewed commenting on my original article about the so-called real estate bubble, but we were quoted in Mark Glaser's Media Shift column about real estate blogging and the increase in bubble bloggers. Scroll down to Update #2 - we've had some folks jump over here from there the last couple of days.

Which reminds me ...
    Trim - thank you for your concerns about my overall health. I only can assume with pseudonym like the one you've selected, you'll be appearing in Men's Health or Cosmo in the near future.
    Kacei - Used Cars was filmed in Mesa when I was growing up. Great movie. Very, very tired analogy.
 

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes

Thanks to Jonathan Miller at the Matrix, I came across this post in Media Shift focusing on the public obsession with real estate. A large portion of the article dealt with the real estate bubble blogs and the motivations of those behind the sites. What struck me as amazingly ironic is that more than one bubble blog is generating revenue for its owner - yet these same blogs are held by their reading audiences as free of any sort of capitalist taint, like the taint that all real-estate agents must carry simply because we do this for a living.

One of the comments to the Media Shift post dealt with everything the reader has "learned" from the bubble blogs that presumably the reader never would have learned from us mere Realtors. And so I thought I'd briefly share what I have learned from the bubble set ...

1. I've learned that attacking the messenger while you accuse the messenger of personal attacks apparently is treated as discourse.
2. I've learned blanket generalizations are completely unacceptable when the bubble theorists are involved but are perfectly fine when the target is one of those evil real-estate agents.
3. I've learned the mainstream media apparently is in NAR's hip pocket - quite surprising when you read the sheer volume of anti-Realtor "news" that passes through the daily papers.
4. I've learned that statistics when presented by a real-estate agent have been twisted to fit an argument. But when out-of-context statistics are presented by a member of the bubble set, said statistics are as divine as the Holy Gospel.
5. I've learned there is no end to the public's willingness to belief in mass paranoia prognostications.
6. I've learned that many people don't know what they don't know - the public STILL believes the MLS is an all-powerful tool which will sell a home and demand access, yet they refuse to acknowledge the one piece - compensation to cooperating agents - that hold it all together.
7. I've learned that I have no interest in wasting my time working with people who think I'd sell them out and talk them into buying a house for $10,000 more than they should ... especially when that extra $10,000 spent, after broker's fees and taxes works out to a $180 net gain for me.
8. I've learned those bubble blogs actively seeking donations (another word for income) are no more clear of ulterior motive than those of us who spend far more of our time dealing with the real estate market.
9. I've learned combinations of profanity I never even heard in a baseball clubhouse - again, when no logical argument exists, lash out and hope your target cowers.

There are some in the bubble community who actually are capable of presenting logical arguments and add to the general real estate arguments. I've enjoyed conversations with more than one as at least these are the folks who take the time to read the other side of the debate, even if they don't agree.

There are others so busy basking in their blog-generated fame that they forget their irrelevance to the industry as a whole and would rather blame real-estate agents for everything up to and including acid rain. They lack the sense to know the difference between a Realtor and a lender, for example, and rant rather than educate their disciples. And should they turn out to be wrong? What will happen to those who blindly followed them? Frankly, my dear, I doubt any of them will give a damn.
(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes

I once made the error of assuming all real estate bubbleheads were alike. Some, at times, actually are well spoken individuals with concerns about the direction of the current market and it's impact on the lives of their families and others.

And then you have some whose call to action causes me to look for torches, pitchforks and look for farm equipment to overturn.

Me thinks I'd prefer to stick with rational thought.

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes

Phoenix's median home price declined .6% in the third quarter of 2006 from the same time period a year ago, according to the most recent numbers released by the National Association of Realtors. The third-quarter median price of $266,500 also was 2% lower than the second-quarter median price of $272,200.

While median home prices are not ideal by any stretch of the imagination, if your intent is looking at the larger trend what you're seeing is a very, very slight decline from last year's run-up, furthering many people's argument that a crash in the real estate market is not imminent. A decline, absolutely - it's already in progress - but a crash, doubtful.

David Nereah at NAR finally admitted much of the nation had become a buyers' market, though his final statement sounds far too much like what we heard through most of this year with a '6' at the end of the date instead of a '7'.

David Lereah, NAR’s chief economist, said market conditions are nearly the opposite of a year ago.  “Last year we had a record sales market and historically tight supplies of homes with buyers bidding over the asking price,” he said.  “With the market in full transition, buyers now have choices and sellers are more willing to negotiate – under these circumstances it’s no surprise that overall home prices are slightly below a year ago.  We expect this trend to continue in the months ahead, but we’ll see modest appreciation in most of the country in 2007.”

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes

Returning from my two-day sojourn down the rabbit hole and into bubble-land ...

In some respects my initial characterization of many real estate bubble proponents as being more interested in bluster than facts proved true ... for example, my opting not to comment on a five-month old market valuation report in favor of waiting for something far closer to current was interpreted as my inability to understand what was written ... but I also encountered some very thoughtful, logical debate both from some of the commenters here and also (believe it or not) the HousingDoom blog.

One suggestion I would make to the bubble folks is if the true implication you are trying to make is not that the market will "pop" like a bubble and instead may decline gradually, perhaps bubble isn't the best term to use. Bubble carries with it certain imagery which leads most readers to assume you're waiting for the market to pop a la the tech bubble and revert to pre-2004 prices.

Oh, and one last thought ... contrary to the notion "if you don't believe in a collapse, you must be telling clients the market always, always, always is on the rise" ... it's possible to acknowledge the decline without believing it will continue sliding another 20 - 30 percent.

In any event, I received several comments on my bubble myth post from John Hildahl, a well-spoken gentleman currently living in Las Vegas after selling his horse property in Oregon. As he says, he's renting in Las Vegas and loving it. Personally, I'd simply be happy being fifteen minutes from Margaritaville but I'm afraid I'd be wasting away there more often than not.

One statement John made in his final comment caught my eye:

"My opinion regarding the Real Estate profession, and I believe it is a profession with many talented, hard-working professionals using business skills, people skills, training, education, and perseverance trying to make a living in a tough world.  Advice:  launch a grass-roots effort and rid yourself of NAR leadership.  These so called leaders are making a mockery of the men and women who are real estate agents.  Many articles call attention to this."

Why am I a REALTOR®? And note, you need to be a member of NAR to say you are a REALTOR. For me, it was less a conscious choice than a need for MLS access. In the Phoenix area, the local associations of NAR own the area MLS. You don't have to join the board, but without the board membership you will not be able to search the listings and take advantage of other services provided in the local MLS system.

Now, would I have joined NAR even if I had not been more or less forced into it? Probably. NAR has an extremely strong lobbying arm and, if nothing else, I believe in self-preservation. So I will not argue that I do not support legislation that promotes and aids the industry.

Having said that ... I certainly don't agree with everything NAR does. I believe the move that caused the DOJ complaint, attempting to limit the listings access for what then was termed "Internet-savvy" (read: deep discount) brokers was short-sighted at best, moronic at worst. After all, many NAR members tend to consider themselves Internet-savvy and I personally count on the IDX listings feed we receive to be one of the primary attractions of my web site. The beagle only gets me so far.

(Quick tangent: for everyone proclaiming what an idiot I am over the last two days, there were nothing but compliments for the beagle. Which means maybe I'm not such an idiot after all, at least when it comes to marketing.)

I believe NAR's overly optimistic forecasts were misguided and likely caused more harm than good by creating credibility issues for everyone in the industry, not just the association's chief prognosticator. I also believe the recent ad campaign, "There's Never Been a Better Time to Buy or Sell a Home," aside from being lame and lacking any legitimate hook (and shouldn't an ad have a hook?) adds to the credibility gap.

There absolutely have been better times to sell a home - eighteen months ago, for example. Of course, some people need to sell now for a variety of reasons. And those who opt to price the home competitively and hire a real estate professional who will aggressively market the home are seeing that homes still are selling, not at the same rates as a year ago (or even a couple of years ago, if you look at the numbers I posted two days ago) but they still are selling.

Aside from the credibility issues, there are gaps appearing in NAR's armor and many are MLS-related. How severe they are depends greatly on the value you personally place on the MLS. Knowing agents in areas where the local brokers own the MLS, I don't see any significant difference in their business but I do see a possible benefit from the perception of a public who knows not all are REALTORS and therefore are exempt from the broad brush with which NAR members are painted.

And that, folks, could be the biggest problem NAR currently faces. For all the advertisements urging the public to ask their agent "if they are a REALTOR, a member of the National Association of REALTORS" a positive answer increasingly is leading to a negative view.

In many ways I think John is right ... new leadership is needed at the top, if only to reform the image that is being battered by the efforts of the current crew.

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes