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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

6 skills humans have that AI doesn’t… yet

(OPINION / EDITORIAL) It’s not unreasonable to be concerned about the growing power and skill of AI, but here are a few skills where we have the upper hand.



Man drawing on a roll of butcher paper, where AI cannot express themselves yet.

AI is taking over the workforce as we know it. Burgers are already being flipped by robotic arms (and being flipped better), and it’s only a matter of time before commercial trucks and cars will be driven by robots (and, probably, be driven better).

It may feel unnerving to think about the shrinking number of job possibilities for future humans – what jobs will be around for humans when AI can do almost everything better than we can?

To our relief (exhale!), there are a few select skills that humans will (hopefully) always be better at than AI. The strengths that we have over AI fall into 3 general categories: Ability to convey emotion, management over others, and creativity.

Let’s break it down: Here are 6 skills that we as humans should be focusing on right now.

Our ability to undertake non-verbal communication

What does this mean for humans? We need to develop our ability to understand and communicate body language, knowing looks, and other non-verbal cues. Additionally, we need to refine our ability to make others feel warm and heard – if you work in the hospitality industry, mastering these abilities will give you an edge over the AI technologies that might replace you.

Our ability to show deep empathy to customers

Unlike AI, we share experiences with other humans and can therefore show empathy to customers. Never underestimate how powerful your deep understanding of being human will be when you’re pitted against a robot for a job. It might just be the thing that gives you a cutting edge.

Our ability to undertake growth management

As of this moment, humans are superior to AI when it comes to managing others. We are able to support organization members in developing their skillsets and, due to our coaching ability, we are able to help others to grow professionally. Take that, AI!

Our ability to employ mind management

What this essentially means is that we can support others. Humans have counseling skills, which means we are able to help someone in distress, whether that stems from interpersonal relationships or professional problems. Can you imagine an AI therapist?

Our ability to perform collective intelligence management

Human creativity, especially as it relates to putting individual ideas together to form an innovative new one, gives us a leg up when competing against AI. Humans are able to foster group thought, to manage and channel it, to create something bigger and better than what existed before. Like, when we created AI in the first place.

Our ability to realize new ideas in an organization

Think: Elevator pitch. Humans are masters of marketing new ideas and are completely in-tune with how to propose new concepts to an organization because, you guessed it, we too are human. If the manager remains human in the future (fingers crossed!), then we know what to say to them to best sell our point of view.

Using what we know, it’s essential for almost all of us to retrain for an AI-driven economy that is most likely just a few years away. My advice for my fellow humans? Develop the parts of you that make you human. Practice eye contact and listening. Think about big pictures and the best way to manage others. Sharpen your mind with practicing creative processes. And do stay up to date with current trends in AI tech. Sooner or later, these babies are bound to be your co-workers.

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Opinion Editorials

Questions you wished recruiters would answer

(OPINION / EDITORIAL) Job searching is anxiety inducing, and not getting feedback can be tough. What can job seekers, recruiters, and HR do to make it easier?



Two men interviewing at a table, job searching.

Job searching can be frustrating and stressful – not to mention anxiety-driven – but also sometimes filled with hope and excitement for a new opportunity on the horizon. Most people aren’t huge fans of multiple interviews, constantly selling themselves, or the uncertainty of when an exciting offer will come their way. Here are some considerations to try to put it in to a healthy perspective.

Yes, you will feel stressed and anxious. If you can, allow yourself to accept these feelings as part of your journey in life. Take note of what can you do to move forward, and hopefully it will propel your energy into time and space that is well spent.

Just know that you are not alone on a myriad of questions that no one has really answered for you. That is mostly due to the other side of the table which usually includes Human Resources and a Hiring Manager.

Question: What is the status of my application?

Answer: It really depends. Did you apply online? Is it sitting in an ATS (Applicant Tracking System = software to track job applicants and open job requisitions)? Has anyone looked at it? Have you gone through a recruiter and are waiting to hear back? Have you sent it to a friend or former colleague who works at that institution? Do we know if this position is still open?

Ideas to move forward: If there is anyone you can get in touch with about your application, do it. Send a polite email to them asking if there’s any chance if the position is still open and/or if your application has been reviewed. If there is no one to get in touch with, keep moving forward in your job searching. ATS’s are GREAT for the employer. They help track applicants and scan for keywords. The challenge is they may not be great for the job seeker and might be sitting in a black hole. Consider that 300 job searching applications are sitting there with yours.

It’s not that you are not good enough. And it’s not that you don’t have what it takes. It’s that your resume is combined with a lot of other information and may not even have been reviewed. They may have also filled the position and didn’t take the posting down.

OR, clients change their minds all the time – maybe they are going in a new direction with this role. See if you can find out the status first. And if you can’t, move on. You can learn more about ATS here from Jobscan.

Question: May I have feedback from my interview(s)?

Answer: Most likely, no. They may give you some simple answer “You didn’t quite have the experience they were looking for” or “We’ve hired an internal applicant.” Without getting into too many details and legal guidelines (that I’m not even sure I’m aware of), company representatives often cannot give too much feedback to an interview for fear of being sued. They don’t want to be sued for ageism, sexism, etc. so it’s easier to not give any feedback.

Please excuse the gross oversimplification here, but also think about the company. They may be trying to recruit new employees for 100s of positions. If they interview even 3-5 people per position, they just don’t have the time to give detailed feedback to every interview. Try to think back to a time that maybe you had a crush on someone and or were dating and it just didn’t fit or feel right. Did you want to have to give a detailed explanation or did you just hope you (and they) could move on? Move on if it’s not a right fit. NEXT.

Question: If not a fit for this role, am I fit for other roles within the organization?

Answer: You can certainly ask this if you are given a rejection (and not ghosted). The truth is, the team (or people) you were interviewing with are most likely not concerned with too many other roles in the organization. They may not have been briefed on what others are looking for nor care – going back to the time thing, they just don’t have a lot of it.

However, it could be worth asking on the off-chance that Jim from another department did mention to them he was looking for someone like you. However, if you don’t hear back on that, definitely do not take it personally. They likely have no clue and it may take you applying to another position or another person in your network helping you to identify this other role during the job searching process.

Question: Why did the recruiter ghost me?

Answer: Honestly, I’m sorry that they did. It’s crappy and doesn’t feel good. It’s disrespectful and really doesn’t leave a good impression. I don’t have an excuse for them other than to say that they’re busy working to fill roles. It’s unlikely that they are on a 100% commission basis but if they are, think about how they need to move on to the next thing to keep food on their table. And even though most get paid a decent base salary, each role does lead to commission for them. It is part of their job responsibilities to find and hire the right talent. Recruiters have a lot of metrics they need to hit and they only have so much time in the day like everyone else. They may not have the luxury of time to follow up with every person that is not the right fit.

I still believe they should let you know, but chalk it up as something out of control, do your best to move on.

Request to HR/Recruiters

If there is any way at all that you can make sure you keep in touch with your job searching candidates (even if it’s to say you don’t have new updates), you will really help their anxiety and help them balance timelines and possibly other interviews and offers.

As this article from Evil HR lady shares, if you are unable to give them feedback regarding their rejection for a position, consider offering a couple things you feel they could approve upon. Your advice may not even be job specific but here are some ideas to consider that may be helpful to the job seeker:

  • Make sure you answer the phone with enthusiasm and not sound like I interrupted you or you just woke up.
  • Be sure to do company and role research for every single interview.
  • Dress to impress – even if it’s a virtual interview (and don’t forget to test your camera and audio before).
  • Turn off your phone and IM notifications when interviewing to minimize distractions.
  • Thank you emails or snail mail are still more than welcome and a nice gesture.
  • Google yourself and do a quick look at what a recruiter might see if they Google you – are impressive and professional details coming up? If not, you may want to work on pushing out some thoughtful content.
  • Tread lightly with insincere LinkedIn connection requests.

You cannot control the process so you must hold onto your hope and continue to make efforts. Hopefully this help shares some insights and helps to normalize this process.

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Opinion Editorials

Woman fired for premarital sex, raises questions of company culture

(OPINION / EDITORIAL) This unfortunate circumstance for a former David Ramsey employee has raised the age-old conversation of how to enforce a company culture.



Company culture being established around a meeting table with dark colored drinks and notebooks.

America, the land of the free, and the opinionated. And in company culture, this is no different.

Over the years the US has grown and changed. A nation that over the centuries formed from the amalgamation of beliefs and cultures. Now let us be frank, there is a majority in certain beliefs and practices. Those groups can also sometimes come with rather large mouth pieces as well, but that isn’t always a bad thing. People’s moral and cultural compasses influence the world around us. Ultimately, we can create cults or communities. We can be harmful or helpful with how we choose to influence those around us.

When you combine that with economics, though, that’s when things can get tricky. The difficulties of mixing the cooperate world with morals and beliefs can get expensive. There are numerous instances of companies being sued for wrongful termination. Currently, Dave Ramsey’s company has recently come into the spotlight due to a lawsuit being filed against them by a disgruntled employee. The company culture has strict rules against certain extracurricular activities. Now usually people would think they would mean recreational drugs, but not in this case. As of March 8th, Ramsey Solutions has reportedly fired 8 employees over the last 5 years for engaging in premarital sex.

Caitlin O’Connor is the latest employee to deal with this situation. Now, while some of us may have seen this company culture and decided to just keep life and work separate, there’s another difficulty here. Ms. O’Connor has recently become pregnant, which leaves no doubt about her outside of work activities. Now there is a number of different emotions that happen here. A woman who is now pregnant is losing her job. This may be a person who has no desire to get married and now she’s thrust into unemployment for doing nothing but enjoying a part of life. It is a frustrating situation to say the least on her side.

In that frustration on the part of Ms. O’Connor, however, there are also similar issues on the part of the company. While they have set up this company culture and laid down rules for all their employees, they now have to uphold and find a replacement for this resource completely unexpectedly. It was not only clearly laid out in their company guidelines that they do not condone this behavior, nor its implications, but Ms. O’Connor openly admitted that she was aware of the implications of her actions as well. This company has built a community with expectations and is willing to uphold them. That is their right.

I remember growing up there was a cake shop in Colorado that refused to create a cake for a gay couple based upon their religious beliefs. It was back in 2012. In 2018 the Supreme Court ruled that the shop had the right to refuse service based on their beliefs, which to be honest was my expectation. However, in the process of this that particular his business has not flourished. Ultimately one has to decide whether they want to follow their beliefs in the face of economic hardship. It’s a true show of faith of course but also, is it practical.

Living your life, your way, is the point of this country. We have to remember to share that space with those who believe differently. Bringing no harm to others is one thing, but can we truly be a common people if we refuse to go outside of our own beliefs and morals?

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