Our Own “Cirque du Soleil”
As time marches forward amidst one of the longest recessions in modern time, we are being forced to participate in one of the greatest balancing acts in real estate history.
Indeed we are engaged in our own industry Cirque du Soleil, a kind of three-ringed act that pushes us to the limits of our economic envelope.
How long can we strike the pose? What series of events will begin the process of reversing the downturn and return some degree of stabilization to the economy. Our collective muscles quiver under the stress of our rigid contortions.
Not too long ago we mistakenly thought, although few will now admit to their acquiescence, that TARP, auto industry bailouts, AIG cash infusions, cash for clunkers, first time home buyer credits, bank loans and the like would magically restore the economy.
Even the National Association of Realtors (NAR), our beloved national union and lobby force, with enthusiastic recklessness, endorsed just about every form of redistribution of wealth forced down our throats by President Barack Obama’s misguided group of tax and spend advocates.
Yes, ours is an industry not too unlike a three ringed circus. There are jugglers, tight rope walkers, clowns, acrobats, lion trainers and bare-back horse riders, all entertaining us while we sit in the grand stands eating our Cracker Jack and cotton candy.
We love a good circus. A good circus takes our minds off the trouble we face. The acts bring momentary relief from the pain we must inevitably face when the show is over and the big tent comes down.
The reality we must face is the choice we made, repeatedly from 2000 through 2007 to made a series of choices that led us to depart from the traditional, sound economic principles that guided our industry in favor of massive personal, corporate and national debt. The circus is over and even the clowns no longer smile.
REALonomics has taken tough positions and we have always attempted to lend our voice to a call for temperance as the circus acts rolled into the big tent, one after another while our industry, clapped, laughed, cheered, jeered and refused to admit the depth of economic adjustment that was about to engulf us.
There is another message we have pushed into the industry for serious discussion and that is the need for top-to-bottom reform, beginning with an examination of the function of NAR, local Associations and indeed our very bloated labor force.
Not many will deny the circus is over. Fewer still will acknowledge the need for comprehensive analysis of the business structure of our industry and how it delivers economic value to entrepreneurs.
A remnant of hard-liners still delivers a false message of a restored economy that will support our 1,000,000± participants, an unbelievable membership count that has no relevance to sound economic and business reality.
Our economy is irrevocably tied to global networks. The real estate industry now has its best shot at reformation. Who will lead the transformation and what forms will it take? What transcendent person, group or entity will emerge with solutions to the complex problems we face as an industry?
How will technology, economics, localism, property data and global realities be bent and shaped to create new vibrant business models that can produce and sustain profitability required for the risks inherent in the real estate business.
After all, the show must go on!