We are on the cusp of perhaps the most significant Presidential election in our lifetime. Since the launch of www.iVoteAmerica.com and its endorsement by REALonomics, we have been discovering that real estate professionals fall into two basic political camps.
The first camp’s position seems to be “I don’t do politics as a real estate professional, it’s personal and I don’t mix it with business…that’s what I pay NAR to do for me.”
The second camp takes a different approach which might be characterized as, “If not now, when…we need to start speaking up and letting our individual and collective voices be heard in order to impact decision-making.”
As we approach the election on Tuesday, November 4, 2008, REALonomics would like to encourage all real estate professional, regardless of which camp they reside in or what their political persuasions might be to vote.
Voting influences outcomes. A proactive real estate industry that votes is but the expression of choice on a single day. Beyond the ballot box we should be using our individual voices to influence opionion and stake our individual and collective places in the political process. Our individual voices form a type of collective concensus in the arena of public opinion and the national soapbox of ideas.
We can engage the voting public by exploring political social media opportunities that are outside industry, such as iVoteAmerica and other political blogs that reach the general public.
Let your voice be heard by voting and by blogging about the great issues of our day that are influencing the country today and into the future.
REALonomics has roughed up Alan Greenspan over his support of the concept of subprime lending and his denial of any contribution to the collapse of the credit markets. See the post.
It looks like Mr. Greenspan has finally started to step up to the plate with acknowledgements that his thinking was less that stellar.
Today, in a hearing before the House Oversight Committee Greenspan finally acknowledge, if only by innuendo, that his judgment fell short of what was needed to predict the housing market decline.
“Given the financial damage to date, I cannot see how we can avoid a significant rise in layoffs and unemployment.
With respect to Greenspan’s belief that banks would act in the best interest of shareholders, Greenspan said his thinking was wrong because there was, “a flaw in the model that I perceived is the critical functioning structure that defines how the world works.” The current crisis was referred to by Greenspan in his opening statement: “We are in the midst of once-in-a-century credit tsunami.”
In essence Greenspan called this a “mistake” in how he viewed the integrity of banks and mortgage companies. Makes us wonder if he just fell off the turnip truck.
Of the current financial crisis, Greenspan said that it “turned out to be much broader than anything that I could have imagined.”
Unfortunately, Mr. Greenspan has not yet acknowledged his “mistake” in his endorsement of subprime lending as something good for consumers. Perhaps another day.
Syndicated from iVoteAmerica
Well, by George, he’s given new meaning to “compassionate conservative” by federalizing the banking and capital systems on his way out of office!
Don’t let the swinging door slap you backside on your way back to Crawford, Mr. President.
According to the Bush Banking proposal, nine major banks have accepted the notion of partial government partnership. These banks are: Bank of America, Merrill Lynch, Bank of New York Mellon, Citigroup, Goldman Sachs, J.P. Morgan Chase, Morgan Stanley, State Street and Wells Fargo.
Watch this video:
George Bush is implementing the G7′s recommendations for government partnership with American banks. In other words, free money from American taxpayers to shore up the international economy.
Is this the new federal socialization of our economy? Bush said, “The government’s roll will be limited and temporary…” Can anyone name a federal program which, after implemented, remained limited or was temporary?
For the full story, visit this morning’s (Tuesday, October 14, 2008) article by Washington Post Staff Writers Howard Schneider, David Cho and Neil Irwin, entitled “Bush Defends Government Bank Investment.”
REALonomics urged the real estate industry to reject the $700,000,000,000 government bailout program.
The National Association of Realtors (NAR) took the opposite position and even launched a national public relations campaign designed to convince us, the members, to support something that historically we have never supported, government interference in the private sector free market.
Well, here we are, a few days hence, witnessing the most massive loss of personal and real estate wealth in the history of the world.
Now let’s talk about the real estate industry specifically. The central wealth producing asset of most Americans is their investment(s) in real estate. Our industry has been dedicated to the creation of wealth through home ownership supported by one’s ability to qualify for mortgage financing and to service the debt based upon qualifying ratios.
It appears we have adopted a position that runs counter to our industry’s historical roots. But worse than that, through industry support of the bailout we have actually made a fundamental mistake in economic judgment and we may have harmed the ability of brokerage firms and agents to be effective ambassadors and cousellors to consumers.
Are we ready to exchange a long-held traditional and fundamental economic model for a new system where the notion of “bail-out” through subsidized real estate welfare is a valid competing model?
Should NAR have supported the $700 billion bail out? We don’t think so and we said so in our post entitled “Warning: RE Industry will be Harmed if Bailout is Backed by Us” on September 30th, 2008.
REALonomics calls on NAR to reverse its position and return to our historical position where we only believe in the American dream of home ownership where individuals and families, under the guidance of sound advice from Brokers and agents, purchase homes they can afford.
NAR’s support of the bail out was wrong and we should make that admission to the American people so that we can regain the trust of consumers.
The question for the real estate industry to grapple with in the midst of the credit crunch is how can we help struggling homeowners in severely depressed markets such as Las Vegas, Phoenix, Miami, Los Angeles and San Francisco?
According to a recent Standard&Poors/Case-Shiller home price index of the top twenty metropolitan area home values, we are seeing record declines. Get a copy of the report.
Here’s the breakdown synopsis (source: Standard&Poors/Case-Shiller) (arrow highlights by REALonomics):
In these and hundreds of other markets, home value declines are taking a toll on individuals and families whose financial security is predicated almost entirely on home ownership.
There are at least three things local real estate companies in partnership with mortgage and title service providers could do for struggling homeowners.
- Set up financial support workshops led by experienced brokers/agents designed to coach homeowners with respect to their property values, the current trends, their specific mortgage situation and how to take positive steps to stay in their homes unless they absolutely must sell at this time. Such workshops should utilize skilled mortgage service counselors (not loan officers) who can give them answers;
- Real estate agents in troubled markets should be literally returning to the old practice of knocking on doors, not to get listings but to meet homeowners as “Property Consultants” to discuss specific home values within their neighborhoods and offer advice. In addition, brokerage firms should deliver resource information to homeowners that will advise them about market conditions, refinancing and other information they need;
- Brokerage firms should turn a portion of their print media budget and Internet costs toward creating blogs that are specifically administered by trained “Property Consultants” who can interact with property owners and deliver solid advice in real time.
During the next 24-36 months brokerage firms who want to build and retain consumer loyalty and predisposition should take a serious look at engaging in the creation of a group of “Property Consultants” who engage homeowners who are facing uncomfortable times.
Such an emphasis sends a powerful signal to consumers that we are serious, skilled, well trained, competent and knowledgeable professionals who can and will assist them with any property question they have, including financial counseling.