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NAR says housing is in a recovery period, we strongly disagree



Hitting the bottom

We are not economists although we closely monitor and study the national real estate economy for hours every day, pouring over statistics and piecing together a picture of health (or lack thereof) in the real estate sector. We report on dozens of metrics that give us a pulse on housing, and we’ve been reporting for a long time that real estate has not quite hit the bottom… yet.

So that is where we are right now and most economists agree. But the problem with economists is that there is rarely a strong consensus about what the future of the economy is, and often the present and the future intersect, so we are all left to choose an economist’s theory that most closely matches what our reality is; there’s no other way. It’s like choosing a horse in a race- you can’t pick “all horses” and feel like a winner when one of them wins (or when one economist is right).

The economist we most closely follow and have mentioned for years is Dr. Mark Dotzour, Chief Economist at the Texas Real Estate Center. In 2008, we wrote, “National commercial developers considering projects in Texas often attend Dr. Dotzour’s forecast meetings before making a decision on their billion dollar deals, I kid you not. Even the most pessimistic, the most well educated, and the most experienced still look to Dr. Dotzour who seems to be the only one with a crystal ball.”

We noted he is “the model which all economists on the national and local levels should emulate. Dr. Dotzour has never been overly optimistic nor overly panicked and he has been right on the money for as long as I can recall as he forecasts locally and nationally (many of his speeches are available here as proof).”

Have we started recovering yet?

Dr. Dotzour said recently at the SIOR Conference, that there was no double dip, and that we haven’t even hit the bottom yet. We noted that “this conflicts with what many other economists are saying and honestly, it conflicts with what we have been saying. We’ve even shown you via chart where the double dip exists. But when Dr. Dotzour says these up and downs don’t account for the bottom yet, we are a bit afraid of what the bottom looks like.”

Dr. Dotzour said, ““The government sector has postponed right-sizing at enormous expense to the American taxpayers” and alludes to “unfathomable budget deficits” holding the economy back.

What is NAR’s position?

The National Association of Realtors takes a different stance and we are shocked given Yun’s typically conservative and realistic outlook unlike his predecessor. NAR’s Director of Quantitative Research, Jed Smith told a San Antonio newspaper this week, “The good news is we’re in a recovery. I have to tell you that because otherwise you wouldn’t know.

We’re not economists, and he could be seeing something we’re not, but honestly, we could not disagree more strongly. Maybe we have hit bottom and Dr. Dotzour is wrong, but we most certainly are NOT in a recovery. Here is a short list of just a few of the many, many reasons that housing is not recovering yet. It could come soon, but we do not believe it will be in 2011 or maybe not even in 2012.

Reasons housing is NOT yet in a recovery period

Despite our finding Smith’s commentary to be either snide or condescending (it’s hard without voice inflections to tell) as he notes “otherwise you wouldn’t know” we are in a recovery unless he told you directly, we would like to point out reasons that we strongly disagree with his assessment of the real estate economy:

  1. Unemployment, unemployment, unemployment. We’ve been saying for years that without healthy employment, there cannot be healthy housing, so until the government stops patting themselves on the back and realize that unemployment is horrible and underemployment is worse, we won’t see a recovery in years. This alone points to a lack of recovery right now.
  2. The current foreclosure backlog could take decades to process. The robosigning scandal where banks used software rather than people to process foreclosures, leading to illegal foreclosures (on wrong addresses or illegally against soldiers, etc.) and ultimately to dozens of lawsuits against the banks plus state and federal agencies investigating and punishing banks for their misdeeds which has led to mortgage processor layoffs and a foreclosure freeze/slowing be it voluntary or involuntary by banks.
  3. Homeowners are not only struggling because of underemployment, unemployment and a general spike in living costs, their biggest investment (their home) has dropped nationally to the lowest values in nine years. Ouch. Home values is where economists point to our current double dip in the recession which is NOT synonymous with a recovery.
  4. The most current data (from NAR, nonetheless) notes that existing home sales have dropped almost 4% nationally in May alone and we’re now in a double digit drop from 2010.
  5. Pending home sales data from last month which shows the number of contracts signed has plummeted 30% since 2010, a dismal number at best. This does not show consumer confidence (which remains shaken at best) in housing. If no one is able to qualify for a loan and offers are down, make no mistake- that spells trouble, not recovery.
  6. New home construction is a disaster and is barely limping along. Although we just reported that new home sales dipped for yet another month in a row by 2.1%, we saw the silver lining in that sales were up 13.5% from 2010 (a year that was even worse than 2011 for builders). Lending is near impossible for small builders and a struggle for even the biggest builders leaving tight inventory which would seem to be a positive that buyers could feel compelled to buy because of the rare nature, but even builders are pessimistic about the rest of this year. Housing permits (a predictor of future building) nudged up a bit recently but overall have faceplanted and done even worse than economists expected. New construction is a tremendous drag on the housing economy.
  7. Supply and demand are off. Based on a comparison of housing preferences, America has too many big-lot housing and not enough small-lot and attached housing. Supply and demand are officially off. This could damage the suburbs with big lots even more substantially than the hit in high foreclosures, inventory gluts and the like.
  8. FHA premiums rose and FHA purchase applications TANKED. If we were in a recovery period and thinks were hunky dory, a premium increase wouldn’t threaten to agitate the market, it would make a small dent and move on, but in this case, FHA apps are lower this year than last.
  9. People are scared. The government is talking about mandating 20% down on all mortgage loans which some say will destroy the ability for most to buy (which NAR agrees with). Because this is unresolved, we remain in a state of limbo- at the current poor state of housing, the economy is struggling, but throw in this grenade and it could sink the whole ship. 20% down wouldn’t destroy a sector in recovery, but it would destroy a sector in decline that hasn’t quite hit bottom.

We could continue, but you get the point- WE ARE NOT IN A RECOVERY PERIOD in housing. It’s not all doom and gloom as this too shall pass, but we cannot agree with a NAR economist whose statements aren’t even in line with their Chief Economist’s recent statements.

We don’t need to be told we’re in a recovery, that simply comes across as cheerleading in a moment in history when we know that we need to brace for hitting bottom, not put on rosy glasses and hope for the best (which echoes of one NAR Economist of the past that has since been skewered for this very reason). Realtors are in for a tough 2011 and possibly 2012, but when a recovery is upon us, we will tell you, because we are hoping like crazy that it comes sooner than later- housing could really use a lifeline.

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  1. BawldGuy

    June 24, 2011 at 2:00 am

    Lani — It doesn't much matter who's the economist on stage for NAR. Mr. Yun was the exception to the rule, but in my opinion was made to look even more conservative than he actually was by virtue of who came before him, and now, apparently, who followed. They're mouthpieces for a group who prospers when times are good, or when recessions are morphing into 'recoveries'. If the facts don't fit their agenda, guess which one gets a makeover?

    This reminds me, (and gives me the creeps a bit) of both 1984, and Atlas Shrugged. Plain talk is the first casualty of duplicity. Words don't have meaning. This is how an economist can, with a straight face, say that we're in a recovery when the unemployment just rose — again — while housing values across the board were simultaneously falling — still.

    The fact that anyone pays attention to anything NAR says/writes about the economy is an indictment on learning curves everywhere. Either that, or, when Russell Shaw said, "There are some things so simple even a Realtor could do it", he was stretching the concept of 'giving the benefit of the doubt' to the breaking point.

  2. Sig Buster, III

    June 24, 2011 at 7:05 am

    I agree with the 9 reasons you listed for saying "We are not in a recovery period". I also agree that these are only some of the reasons we are not in a recovery. A recovery may appear to be happening in some areas, but certainly not overall, and clearly there is no real momentum.

    I listen to "economist" with some amusement because they all have the same statistics, yet most of them have different conclusions and opinions of what the statistics mean. None of the "economist" are making a living on the street selling real estate. Therefore, I don't think they have a clue as to what is really happening on the street. Every Realtor I talk to tells me the same thing when I ask them "how's business"? "It sucks"! is the answer most given, and the most polite answer I receive.

    So what is the root cause of these problems? I think the answer is GOVERNMENT. They have finally regulated us out of business. They have hurt us directly with the evil DOJ but by taking over the banks they have about finished us off. Or so it seems by reading your list. This has happened in spite of the false spin NAR has fed us over the years about how they have acted in our favor. NAR has lost many fights and won only a few in Washington. They are anemic at best. I have earned the right to say this because I've been there and watched them operate.

    There seems to be a direct disconnect between "The Powers that Be" within NAR and the Realtors on the street. When NAR decides to listen and actually act on what the members are telling them, then and only then will we Realtors, As a group, be able to change things in Washington. Only then will we be able to throw off the yoke of GOVERNMENT and get this country moving again.

    Sadly, this seems a long way off. "The Powers That Be" within NAR have signaled to us and rammed down our throats that raising dues for political purposes and thereby throwing more money at the problem will surely deliver us from the strangle hold of GOVERNMENT.
    Yeah! Now why didn't I think of that?

  3. Joe Loomer

    June 24, 2011 at 9:46 am

    I'm disgusted that an organization that just hiked my dues in order to push for more stimulus in the housing market will flat out lie to the American people. Even the best selling county in my area has seen significant losses in value – and we never had the hyper-inflation in home prices experienced elsewhere. May sales were the lowest in MLS records for that month.

    Navy Chief, Navy Pride

  4. Benn Rosales

    June 24, 2011 at 9:54 am

    The word recovery is subjective for the most part however, if translated to human condition one could argue housing is stabilized. If nothing good and or really bad is happening then one could say it's resting comfortably with a good prognosis with plenty of rest and by meeting certain conditions over time. I understand (I think) what NAR is saying and could be chalked up to a democratic (wishful thinking) talking point.

    It's a talking because if the budget isn't cut capped and controlled housing will flatline – end of story. That doesn't spell reelection for any of NAR's friends in DC or around the country.

  5. Mark Brian

    June 24, 2011 at 12:59 pm

    I guess it all depends on how you define "recovery". I am not seeing a recovery right now or feeling it. Sure, for some the opportunities are out there in the real estate market. But for most Americans, times are still tough and they are worried.

  6. Michael Hon

    June 24, 2011 at 3:45 pm

    You are right on the money! The word recovery is subjective for the most part however, if translated to human condition one could argue housing is stabilized. If nothing good and or really bad is happening then one could say it’s resting comfortably with a good prognosis with plenty of rest and by meeting certain conditions over time.

  7. John Slocum

    June 25, 2011 at 8:59 am

    In our local Vancouver WA market, the level of Demand dropped 20% a year ago with the expiry of the Tax Credit program, and showed relative support at the newer, lower level. From a "technical market" perspective, the 3-month rolling average for Demand finally turned north two months ago, piercing the longer-term 12-month rolling average for Demand. This up-tick in demand has also been sufficient enough to cause the 12-month trend line to point in a positive direction. In my opinion, if the politicians will keep their feet off both the brakes and the gas pedal, this local market my go from the verge-of-recovery on to Recovery.

  8. sfvrealestate

    June 27, 2011 at 6:19 pm

    Did Yun quote any statistics? I'm curious.

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Opinion Editorials

Freelance is the Future? I call bull malarky

(EDITORIAL) Some have predicted that due to company needs and employees’ desire for flexibility, and even COVID, freelance is the future of work. But I have reservations.



Freelance desk

Long gone are the days of punching a clock in Corporate America to be in your seat at your desk for an exact period of 8 hours on a day x 5 = 40 hours per week. If you work in an office setting now, usually you are expected to manage your time and finish your projects but companies have adjusted their strict butt in seat polices so that you can come in late after a doctor appointment or even leave a little early for Susie’s soccer tournament.

The truth is, with the advancement of technology and connected devices, many of us can work from anywhere (as long as there’s Wi-Fi or we have our hotspot). So, as long as your work gets done, there’s a little bit of room for “flexibility”.

When a company pitches this as flexibility, it’s really just a way of re-wording that you will work a lot so they will cut you some slack here and there considering most of us work well over our 40 hours a week. We can check email first thing in the morning, forward documents from the plane and even be on conference calls while in a line or in an Uber. You may work late on a Tuesday due to Wednesday deliverables which allows you to take off on Friday at 3pm when usually your projects are in a good place. There are also times where you will work on the weekend.

The opportunity to work anywhere has led to some considering that freelance is the future? I just don’t buy it. And this might be an unpopular opinion. I think that’s like turning the Titanic around. People rely on companies to offer a feeling of stability (or so we think) so that you know there’s a paycheck coming in every other week and you definitely have your fair share of projects (oh yeah, plus healthcare benefits).

If we all moved in to freelancing, we’d have a wide variety of clients, customers, teammates and paychecks that could be difficult to keep up with. We’d be forced to be the CEOs, CTOs, CIOs, CMOs, CFOs, oh, forget it, the entire C-suite of our own careers. It’s really difficult to generate new clients in the future while you’re working on a current project.

However, it’s equally difficult to have a lull so you have to be constantly engaged and pitching business (at the same time you have your current work). You have to be on your A-game at all times and out pitching yourself and your brand. You have to be creating content on all the social channels and be invited to participate in fancy conferences and meetings. This unfortunately is the life of freelance.

Does it seem like more people will do freelance? Yes. There’s lots of opportunity now thanks to the world wide web. But I predict they will do this in addition to their regular jobs. Is it possible that we may move to a gig economy? We are already there. You’ve heard of Uber, Lyft, Instacart, Fiverr and Upwork…It seems like that most people that have 2-3 gigs to make them whole are typically looking for full-time opportunities or would love to find something that can replace the others with more consistent work and not all the hustle. Are Small Businesses on the rise? Absolutely.

It seems that it depends on your desire for either slightly more predictable work and paychecks or if you’re a throw caution to the wind person and live that freelancer life. Also, if your skill sets are the ones employers are looking for on an ad hoc basis. No doubt many people live a freelancer life and love it. But I just don’t see it being the masses – I think it takes a special kind of dedication to rely on freelance and/or starting your own business. Plus, you’re off your parents’ healthcare at age 26. That’s when real the “real job” starts to sound really appealing.

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Opinion Editorials

Ways to socialize safely during quarantine

(EDITORIAL) Months of isolation due to quarantine is causing loneliness for many, but joining virtual social groups from home may help fill the need for interaction.




Quarantining, sheltering in place, staying home. We’re tired of hearing it; we’re tired of doing it. Yet, it’s what we still need to be doing to stay safe for a while longer. All of this can be lonesome. As the days turn into weeks and weeks into months, the alone time is getting to even the most introverted among us.

Solitary confinement is considered one of the most psychologically damaging punishments a human can endure. The New Yorker reported on this in a 1992 study of prisoners in detention camps in the former Yugoslavia, as well as Vietnam veterans who experienced isolation. These studies showed that prisoners who had experienced solitary confinement demonstrated similar brain activity to those who’d suffered a severe head injury, noting that “Without sustained social interaction, the human brain may become as impaired as one that has incurred a traumatic injury.”

We aren’t meant to be solitary creatures. Your “pandemic brain” is real. That fogginess, the lack of productivity, can be attributed to many things, including anxiety, but being kept apart from other humans is a big part of it too. Be kind to yourself, give yourself grace, and join others virtually. Be it an app, a class, a Facebook group, a chat room, or a livestream, someone somewhere is out there waiting to connect with you too.

The good news? We are lucky enough to live in an era of near limitless ways to interact socially online. Sure, it is different, but it is something. It’s important. The best thing about this type of social interaction is being able to hone in on your specific interests, though I’d caution you against getting caught in an online echo chamber. Diversity of interests, personality, and opinion make for a richer experience, with opportunities for connecting and expanding your worldview.

Here are a few suggestions on ways to socialize while staying home and staying safe. Communicating with other humans is good for you, physically and mentally.

Interactive Livestreams on Twitch:

Twitch is best known as a streaming service for video game fans, but it offers multiple streams appealing to different interests. This is more than passive watching (although that is an option, too) as Twitch livestream channels also have chat rooms. Twitch is fun for people who like multi-tasking because the chat rooms for popular livestream channels can get busy with chatter.

While people watch the Twitch hosts play a video game, film a live podcast, make music or art, mix cocktails, or dance, they can comment on what they’re watching, make suggestions, ask questions, crack jokes, and get to know each other (by Twitch handle, so it is still as anonymous as you want it to be) in the chat room. The best hosts take time every so often to interact directly with the chat room questions and comments.

Many Twitch channels develop loyal followers who get to know each other, thus forming communities. I have participated in the Alamo Drafthouse Master Pancake movie mocks a few times because they are fun and local to Austin, where I live. Plus, in my non-quarantine life, I would go to Master Pancake shows live sometimes. The chat room feels familiar in a nice way. While watching online is free, you can (and totally should) tip them.

Online trivia in real time:

There are some good options for real-time online trivia, but I’m impressed with the NYC Trivia League’s model. They have trivia games online on Mondays, Wednesdays, Fridays, and Sundays. The NYC Trivia League seems to have figured out a good way to run the game live while keeping answers private from the other teams. They run games on Instagram Live with a live video of the host, and participants answer via the question feature. Clever!

Online book club:

First I have to shout out my Austin local independent bookstore, BookPeople, because they are fantastic. They run book clubs throughout the year, along with readings, book signings, and all things book-related. BookPeople hosts several online book clubs during these lockdown days, and most people will find something that appeals to them.

I’m also impressed with this list from Hugo House, a writer’s resource based out of Seattle. This list includes Instagram and Goodread book clubs, book clubs for Black women, rebels, and poetry lovers. The Financial Diet recommends the Reddit book club, if you are comfortable with the Reddit format. Please note that it’s a busy place, but if you like Reddit, you already know this.

Cooking class or virtual tasting:

This is doubly satisfying because you can follow these chefs in real time, and you end up with a meal. There are a couple on Instagram Live, such as The Culinistas or Chef Massimo Bottura.

You can also participate in virtual tastings for wine, whiskey, or chocolate, though you will have to buy the product to participate in the classes (usually held over Zoom or Facebook Live). If you are in Austin, Dallas, or Houston, I recommend BeenThere Locals. The cost of the course includes the wine, spirits, or cooking kit in most cases, and all of the money goes to the business and expert hosting the class.

Look for your favorite wine, spirits, cheese, chocolate makers, and chefs that are local to you to find a similar experience. Most either prepare the class kit for pickup or delivery within a local area.

Quarantine chat:

To interact with another quarantined person seeking social interaction, there’s Quarantine Chat. Quarantine chat is one of the ways to connect through the Dialup app, available on iOS and Android devices. Sign up to make and receive calls when you want to speak with someone. The Dialup app pairs you randomly with another person for a phone conversation, at a scheduled time, either with anyone or with someone with shared interests.

Quarantine chat takes it a step further with calls at random times. When your quarantine chat caller calls, you will not see their number (or they yours), only the “Quarantine Chat” caller ID. If you are unable to pick up when they call, they will be connected with someone else, so there is no pressure to answer. It’s nice to hear someone else’s voice, merely to talk about what you’ve been cooking or what hilarious thing your pet is doing.

Play Uno:

Uno Freak lets people set up games and play Uno online with friends or strangers. Players do not need to register or download anything to play. Uno Freak is web-based.

Talk to mental health professionals:

If your state of loneliness starts sliding toward depression, call someone you can speak to right away to talk over your concerns. When in doubt, call a trained professional! Here are a few resources:

  • National Alliance on Mental Illness (NAMI): The NAMI HelpLine can be reached Monday through Friday, 10 am–6 pm, ET, 800-950-NAMI (6264) or
  • Crisis Text Line: Text HOME to this text line 24/7 for someone to text with who will also be able to refer you to other resources: U.S. and Canada: 74174, U.K. 85258, Ireland: 50808.
  • Psych Central has put together this comprehensive list of crisis intervention specialists and ways to contact them immediately.

There are many ways to connect even though we are physically apart. These are just a few real time ways to interact with others online. If you want something a little more flesh and blood, take a walk around the block or even sit in a chair in front of where you live.

Wave at people from afar, and remember that we have lots of brilliant doctors and scientists working on a way out of this. Hang in there, buddy. I’m rooting for you. I’m rooting for all of us.

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Opinion Editorials

Working remotely: Will we ever go back? (Probably not)

(OPINION / EDITORIAL) Now that the pandemic has opened the door on working remotely, there’s no way we’ll put the genie back in the bottle. But, here’s some ways you can adapt.



Woman working remotely on her couch with a laptop on her lap.

When it comes to working remotely, will the toothpaste ever go back in the tube?

Mark Zuckerberg recently said, “We are going to be the most forward-leaning company on remote work at our scale…” By 2030, Zuckerberg anticipates that over half of Facebook’s workforce will be remote. Many other companies are jumping on the work from home bandwagon. Working remotely has helped many businesses manage the pandemic crisis, but it’s unsure what form remote working will take over the next 10 years.

We know that employees are responding positively to WFH, as reported in this article – Employers: Lacking remote work options may cause you to lose employees. As offices transition to a post-COVID normal, here are some things to consider about your office and remote work.

What does your business gain from allowing workers to WFH?
The future of remote work depends on a conscious application of WFH. It’s not just as easy as moving employees out of the office to home. You have to set up a system to manage workers, wherever they are working. The companies with good WFH cultures have set up rules and metrics to know whether it’s working for their business. You’ll need to have technology and resources that let your teams work remotely.

Can your business achieve its goals through remote work?
The pandemic may have proved the WFH model, but is this model sustainable? There are dozens of benefits to remote work. You can hire a more diverse workforce. You may save money on office space. Employees respond well to remote work. You reduce your carbon emissions.

But that can’t be your only measure of whether remote work fits into your vision for your organization. You should be looking at how employees will work remotely, but you need to consider why employees work remotely.

The work paradigm is shifting – how will you adapt?
The work environment has shifted over the past century. Remote work is here to stay, but how it fits into your company should be based on more than what employees want. You will have to work closely with managers and HR to build the WFH infrastructure that grows with your organization to support your teams.

We don’t know exactly how remote work will change over the next decade, but we do know that the workplace is being reinvented. Don’t just jump in because everyone is doing it. Make an investment in developing your WFH plan.

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