I shouldn’t respond. I ought to allow this typically one-sided argument fade into the ether without further comment. But I just can’t. And it’s all because of one sentence:
Here’s the setup: read a news article that indicates that 90% of home buyers are not in the market for a home in the near future. Disregard how that figure relates to similar figures in past years. Mock those who dare to bring up such relevant data. And then deduce that is 90% of home buyers aren’t buying, 90% of real estate agents will be forced out of the business.
Wait … maybe Barry’s onto something after all.
Kansas City Royals Face Detroit With Six-Player Lineup
KANSAS CITY – After learning that seventy-five percent of Kansas City residents have no intention of going to a Royals game this season, the club released 19 players from its roster and played with just six players Friday night.
Carnival Cruise Lines Scuttles Fleet
MIAMI, Florida – In scenes reminiscent of the Andrea Doria, Carnival Cruise Lines scuttled all but one ship after learning that 99% of respondents to a nationwide poll said they would not be taking a cruise this year.
American Bar Association Sees Severe Decrease
… actually, forget that one. Some people might hope it’s real.
Barry knows he’s twisted the data to create an outlandish post. He has to know that he’s done it. He’ll defend it to his dying day because that helps generate traffic. And as some of the so-called “experts” preach, traffic’s the big dog.
I shouldn’t respond to what amounts to a publicity stunt. I really shouldn’t. But sometimes it feels like if you let some folks pee on enough trees, we all end up drenched in urine.
Bill Lublin
April 25, 2008 at 10:00 pm
Jonathan: You must be reading my mind – I was halfway through writing a post about two surveys I had recently read – One in which 60% of the public was not going to buy a house in the next year and anohter which stated that 60% ofthe people polled were going to buy with in the year (oddly enough the 60% who were not going to buy thought their houses were going to increase in value).
I love the statistic that said that house values had gone down 8% in the last year – Good News in L.A. and Las Vegas – Not such good news in Philadelphia where prices have remained stable-
All we can do is keep putting out the truth and cautioning others to check their sources and look at the total picture, not the buzz word stats that make headline –
And by the way – sorry about the Royals 😉
Trace
April 25, 2008 at 10:05 pm
You’ve missed a great opportunity to use his own data to make your case in an argument against the validity and relevance of his statements and logic, although I get your point.
As a Lane Bailey writes in the comments of the original article, “In any given year, only about 12% of people have been looking to buy/sell a home. So, that means that in a given year, 88% of the population wasn’t in the market. So, if that has dropped from 12% to 10%, will 90% of the agents go away?”
His own numbers would indicate a 17% reduction (% decrease in market participants) in the number of agents if you accept his argument that there is a point for point % match between buyers not in the market and unemployed agents…..
The truth is that it is actually not possible to make such a correlation because his assertion is based on bad logic. His assertion doesn’t even take into consideration the most important piece of data which is how many agents there are in the marketplace……..if there are 10 million agents a higher percentage reduction in the work force will occur in a down market whereas if there are only 1000 agents, a much lower percentage will become unemployed in a downturn….
The author also uses supply and demand as a blunt force weapon without any consideration for market cycles….. I might have politely suggested he read up on this (https://en.wikipedia.org/wiki/Business_cycle) , if I wasn’t acutely aware that the article was purely sensationalistic in nature. 🙂
Jonathan Dalton
April 26, 2008 at 9:26 am
Bill – if the Royals did reduce their roster by 75%, would anyone notice? 🙂
Trace – someone actually did the math in the comments, if I recall, but was dismissed with the above line about what data we consider valid. But since the argument is based on faulty logic, as you said, there was no reason to even go through the exercise again here.
Barry Cunningham
April 26, 2008 at 10:42 am
Jonathan, while it may make some comfortable to discredit statistics, I have yet to see one, even one detractor offer up a single study, survey, poll or any data to the contrary…including now you.
I spend a lot of time researching and talking to a lot of very reputable sources and data providers. If there is someone I need to talk to that has some data in counter to the data I used for this post, then by all means, pleas, provide it and I will talk to him or her.
Absent any information to the contrary, Realtors who have a probelm with certain data are not offering up anything but opinion.
By the way..many who did not want to believe the numbers have asserted that it was my data? It’s quite telling that CNN Money and the AP / AOL Finance, quite reputable sources indeed, were not questioned in any comment or response.
As I told Lane, if you do not believe the numbers, and you have contrary data feel free to give them a call and maybe they will accept your info and issue a retraction.
Funny, the main point of the article was the irrefutable data regarding supply and demand which was the main point of the article.
It’s easy to write posts, and make claims, and deny, it’s a typical response.
Was our article designed to drive traffic? Duh, of course it is, why else would anybody write. It amazes me when people wonder aloud if that is a reason behind an article. Ask major media organizations if their articles are designed to drive traffic or subscriptions. You’ll get a resounding yes.
We are not fabricating anything and would never do that, but we write many articles from many different points of view always based in fact. Our readership and listenershipo which is growing in leaps and bounds validates this for us…so we must be doing something right.
I applaud you for continuing this discussion and opposing viewpoints are always welcome. I also enjoy your blog quite a bit and we would like to have you on the show on one of our “Blogging Thursday” editions.
Keep up the good work and as always your opinions are greatly valued…even if they are dissenting in nature.
Glenn fm Naples
April 26, 2008 at 1:54 pm
I agree and read the same article as Barry, however, I do dislike global statements. Real estate is still has local demand and supply. Yes, the inventory of available is quite excessive, however, it does vary according to location and areas within a particular location.
As real estate agents we still need to be mindful of trends that we see via our local MLS’s and be able to interprete that data for the buyer or seller.
Jonathan Dalton
April 26, 2008 at 3:57 pm
Barry, I’m not disputing the data. I’m disputing your conclusions regarding 90% of agents falling out of the business because 90% of homebuyers aren’t buying. I believe that conclusion is based on faulty logic and the end result, aided by a sensationalistic headline, is a failing argument.
Also to clarify, I don’t write for traffic. If I did this post would be on my main blog. Those days are behind me. Traffic is nice but it needs to be focused traffic – traffic by those who actually intend to buy or sell homes in the Phoenix area and possibly use my services. A high Technorati rank or a high rank on BlogTopSites fueled by using the main name in the news in a given week is useless to me.
Supply and demand is another story altogether, which is why I’ve tracked absorption rate on my blog since July 2006. Inventory numbers to my mind are useless without knowing what the demand may be.
If you’d written about supply and demand I probably would have applauded. But it was the turn to the sensational in a blatant traffic grab that caused me take issue.
Thank you for the compliment of following me and I’ll take you up on that invitation in the future.
Barry Cunningham
April 26, 2008 at 4:14 pm
Aaaah..therin lies the problem Jonathan..I never made any such conclusion. You did.
The title of the post is as follows:
“If 90% of the Buyers Go Away Will 90% Of Realtors Go Away As Well?”
As you can clearly see, that was a question posed to readers. I left that open for the reader and commenter to answer. No where in the article, not once, do I conclude that 90% of agents will go away. Re-read if you think otherwise.
Too many people, (i.e. Realtors) become incensed when reading headlines and fail to actually read through the content. I can always tell dependingupon the response via email or commentary.
As for the style of writing, our brokerage related site is completely different than the radio show site. The real estate sales site is COMPLETELY as you say, for “those who actually intend to buy or sell homes in” our area.
The radio show blog is specifically to discuss real estate related issues on a global scale and is written for a mass audience. It is SPECIFICALLY non-local and like any media organization is written to attract the widest audience possible for obvious reasons.
I look forward to continued discussion with you and your input is most assuredly valued.
Jonathan Dalton
April 26, 2008 at 6:45 pm
A guy walked into psychiatrist, Barry, and the doctor pulls out the cardboard cards for a Rorschach Test.
“What do you see, Mr. Jones,” the doctor asks. “Two people having sex,” replied Mr. Jones. The doctor wrote down the response and held up the second card.
“What do you see, Mr. Jones,” the doctor asks. “Two people having sex,” replied Mr. Jones. The doctor wrote down the response and held up the third card.
“What do you see, Mr. Jones,” the doctor asks. “Two people having sex,” replied Mr. Jones.
“Mr. Jones,” said the doctor, “it appears you’re obsessed with sex.”
“Why do you say that,” said Mr. Jones. “You’re the one with the dirty pictures?
If you didn’t say it, you absolutely implied it. Please don’t pretend otherwise …
Jonathan Dalton
April 26, 2008 at 6:46 pm
Bloody block quotes didn’t work. Let’s try again …
Jonathan Dalton
April 26, 2008 at 6:47 pm
Oh, the heck with this … here’s the bloody citation:
Since unsold homes equates to unearned commissions, what are the majority of real estate agents going to do? Earlier this year, we wrote what was viewed as an inflammatory article announcing the NAR Going Out Of Business Sale. Doesn’t sound too far fetched anymore does it?
Don’t Believe It’s A Going Out Of Business Sale…Then Somebody’s Lying To You!
Maybe you didn’t quote 90% in the article after the headline, but methinks you’re hinting at many folks leaving the business else NAR wouldn’t be going out of business.
Genuine Chris Johnson
April 26, 2008 at 9:44 pm
60% of the public doesn’t buy houses in ANY given year. Or more. Barry’s wrong here, because people also lie about their intentions, etc.
Good post JD.
Barry Cunningham
April 26, 2008 at 10:23 pm
Jonathan..think what you will. I asked a question, supported by a survey and I asked for responses. As for agents leaving the business, many reputable sources say that number could be 30-40% or higher…source: NAR…need more?
I don’t need innuendo.
As for genuine Chirs…mopre of the same. discrediting published surveys and data and offers no substantive data to the contrary. It’s pretty typical like I said earlier.
An argument might have more substance if one could back it up with actual documentation. I quote a study, I get met with rhetoric and opinion…and I get accused of having flawed data.
It might make sense to the usual suspects but to a greater portion of those in the business and more importantly, the Consumer…you know the one you actually want to buy something…sees otherwise.
The continued rejection for business research norms is readily apparent and the Consumer is taking notice. It’s time for agents to stand up to published fact and meet it with data to the contrary to support their beliefs otherwise it sounds like a lot of whining.
So the question remains as it did on the day the article was published…Since unsold homes equates to unearned commissions, what are the majority of real estate agents going to do?
Instead of rejecting data and questioning motives, why not just answer the question?
Bob
April 26, 2008 at 10:34 pm
In the first 6 months of 2005, 50% of the agents who belonged to the San Diego MLS had made one sale or less. That was three years ago in a dramatically different market.
Someone asked about agents and lenders in California as they related to unemployment stats – “if you aren’t making money, are you still employed?”.
Was Barry’s question that far off?
Jonathan Dalton
April 26, 2008 at 11:58 pm
> and I get accused of having flawed data
No, you were accused of leaping to a faulty conclusion from which you’re backpedaling in the name of calling it a question. I realize that ignoring what’s actually being written and dismissing the person with a wave of the hand once it is clear that person isn’t backing down is part and parcel of the dog blog, but I’d like to think you’re better than that, Barry.
If you had printed the 30-40% number anywhere in your article, rather than in your defense here, I’d have supported it because I’ve already seen that happen here locally. Even wrote about it once upon a time.
To answer the question – no, 90% of all agents will not go out of business. Happier now?
Glenn fm Naples
April 27, 2008 at 7:47 am
Bob – were there sales of new construction which might not be tracked in the San Diego MLS? The Naples MLS does not track sales of new construction, if it is not listed on the MLS. Personally, I sold new construction with none of them listed on the Naples MLS. My stats are distorted by this fact.
I would think that since each real estate agent has an independent contractor agreement with a broker they are employed – but contradicts the earning a living aspect of employment.
Barry Cunningham
April 27, 2008 at 8:12 am
Jonathan…if you want to throw flame, by all means, have at it and be comfortable in it. You choose to accuse and that’s fine, if it makes you happy, indulge yourself. Trust me, I don’t “backpedal” from ANYBODY! Certainly not someone who insists on furthering an agenda of implication.
If you have read my articles , I think you will see that I don’t have any problem with being direct. I asked a question in a manner to obtain the most amount of commentary. It was successful then and it is successful still.
My feeling, since you never asked, Is that the number will continue to climb…to what end I don’t know. I don’t have that data. Could it get to 90%…I think only one component keeps it from rising that high. As an independent contractor, an agent can be out of the business , doing nothing in the industry and still show to be on the NAR rolls and state rolls as an active agent.
That factor removed and I think we could possibly see a very, very, high inactive number.
In reading your articles, you have shown the propensity for much higher articulation than resorting to implication.
All you had to do was ask if you had a question. This is your space and you can do as you wish but implying I was being sly is wholly inaccurate and erroneously accusatory.
Toby Boyce
April 27, 2008 at 8:53 am
I think the “being employed” and “earning a living” are too very-very different things.
Glenn, I wouldn’t be surprised if Bob’s number is right — I went to a CE class and the stats – which I of course can’t find to support – are that the average agent does something like 1.5 deals per year. And they got very specific that something like 30% have never done a deal. (these are from memory — so hopefully someone will correct me).
I just closed on a deal on Friday where the other agent made a comment “this is my first transaction since last September.” Went into a contract where the other agent hasn’t had an ACCEPTED OFFER since July.
This is in an area where the average “one-side” commission is less than $5,000, pretty quick to see why the herd is thinning.
Jonathan Dalton
April 27, 2008 at 9:20 am
Barry, I guess I missed the comment on your thread where you explained that you didn’t mean to imply that 90% of all agents were going out of business. I only saw the comments where you chose to mock those who were commenting not on the notion of supply or demand but on the implied conclusion in your headline.
For instance, Lane Bailey simply quoted the numbers and referred directly to your 90% figure from the headline. You chose to give Lane the number for the AP and said to call if he felt the data they used was erroneous. Except he never questioned the data.
Larry Brewer had no issue with the data either and agreed some agents won’t survive. Your question was the one I posed above. Again, there was no issue with the data, only the conclusion … I’m sorry … question in your headline.
If I had a question I would have asked and risked facing the wrath that comes to many. But in my mind, there was no question about the intent.
Jonathan Dalton
April 27, 2008 at 9:22 am
And to Toby, Bob, etc. – the number I keep hearing from Dave Liniger at RE/MAX is 400,000 of the agents in NAR did not close a single side last year. Being licensed doesn’t mean you’re in business.
Barry Cunningham
April 27, 2008 at 9:34 am
Didn’t know svengali went along with agentgenius..but if it works for you then fine. In any event. You have an opinion and nothing more, I surely know what I wrote and my intent. Only I know that, and I have stated it clearly.
You are entitled to that which is your opinion…and that’s all it is.
FYI…here in Broward County…500+ closed sales in each of the last couple of months…or 1500+/- closed sales in total thereabout in the last 3 months…if each was seperate then we’re talking 3,000 sides of transactions…over 30,000 licensed agents…do the math.
My question remains. We do not know the spot where the parachute will land but it’s not looking good. Like I said and will reiterate, As an independent contractor, an agent can be out of the business , doing nothing in the industry and still show to be on the NAR rolls and state rolls as an active agent.
I am not here to convince you, and this is my last comment, but “some” agents really, really, need to look at the numbers BEFORE insinuating.
We’re going to have somebody from AOL Finance on this week to talk about the numbers and the data they have compiled. We’re also going to have somebody from Gallup on this week to talk about the real estate numbers.
You might find it interesting, you’ll definitely find it educational.
The following week we have Bob Shiller on. After these interviews there will be a lot of substantive data for you to question. Not liking the data is one thing…but it is substantive nonetheless.
Do you have anybody that you would like us to talk to that maintains data that you feel is nationally recognized and can support your continued discrediting of published research? I would gladly get them on the show…anybody? Maybe one person?
Have a great Sunday.
Jonathan Dalton
April 27, 2008 at 9:42 am
In this age of transparency, some things are more transparent than others. You don’t need to be a svengali to see that.
And since this is my last comment, it’s not the data I’m questioning. I’ve said that several times now.
Bob in San Diego
April 27, 2008 at 10:57 am
Glenn,
The builders that coop with agents tend to list their inventory in the MLS, so the numbers are probably not that skewed.
Jonathan Dalton
April 27, 2008 at 12:42 pm
It may be a local thing, Bob … builders don’t put new homes in the MLS and only a portion of their spec inventory as well.
Bill Lublin
April 27, 2008 at 1:13 pm
Johnathan – Great Post, as I said earlier, and clear in your point – Which is that statistics can be used to prove any point and are only worthwhile to the person commissioning the research for specific purposes (and understanding that the stats , or poll, or survey, are limited by the scope fo the data gathering, the methodologies of collection and interpretation) – So plainly put – generally people use statistics to prove a point – and usually there are other statistics which prove the opposing point.
Barry; Not everyone writes for traffic as you said earlier – Johnathan made that point earlier, and I wanted to reinforce it (I just write because after 32 years of marriage it was a pleasure to have someone ask me for my opinion! – I’m not doing it to drive traffic anywhere)
And since you wanted a survey or poll regarding statistics, I took a survey of a number of respected international figures – I hope this data is sufficient for the purposes of this discussion, since, statistically, 100% of the participants polled felt that statistics were unreliable.
Barry Cunningham
April 27, 2008 at 1:20 pm
Bill..run your business on thos quotes and project your earnings on them. Hope they work out for you.
Chris Lengquist
April 27, 2008 at 7:21 pm
Back off my Royals! 🙂
Anyway, the author of that post has made quite a splash in the blogging community of late. But then again, the National Enquirer generates quite a readership to. I just don’t bother to pay attention to either.
But that’s just me. He can do what he wants. I’m fine with it. Whatever works for him. I just choose to handle myself differently, that’s all.
Bill Lublin
April 27, 2008 at 8:27 pm
Barry; I’m celebrating 37 years in the business, and 25 years of operating a business knowing that those quotes need to be kept in mind when analyzing any numbers or reading about anyone else’s analyses – I appreciate your good wishes, and will continue to grow the business as I have in the past 🙂
Chris – I’m feeling the love for the Royals – after all I’m a Phillies fan, something that carries its own unique burden! 🙂
Bob
April 27, 2008 at 8:53 pm
Jonathon – its aways a local thing. 😉
Jonathan Dalton
April 27, 2008 at 9:21 pm
Bob – that’s the beauty of this business, my friend.
Bill – Only 37 years? Clearly you’re unqualified to comment. 🙂
Chris – I agree with you. When I was reading yet another tired argument about disintermediation, I ignored it. I’ve actually ignored most of what was written because it’s as predictable as a Hardy Boys novel. Blogger writes something sensationalistic, dares anyone to enter the “conversation” and then dismisses any counter-argument without the slightest bit of introspection.
And for just a few hundred bucks, you too can learn to write from a position of moral certitude even when you’re absolutely wrong.