The Obama news conference was followed this morning, Saturday, November 8, 2008 by a radio address with similar content. These two initial events give us hints about the Obama economic model that will shape America and of course, the real estate industry for perhaps decades.

Attacking the Economy Means Controlling the Outcome

The Obama team is going to attack the economy in laser-like fashion. New rules are going to be written that will impact the private sector and retool the way in which those transactions dependent upon credit and lending work.

REALonomics has believed for some time (years, actually) that the real estate industry needed to redefine itself through sweeping consumer-centric changes driven mostly by standards based brokerage and maximum transparency.

What we never knew and could never predict are the bleak economic factors that now give rise to the transformation of our business models and have fueled a meltdown of home values in such universal proportions. Principle: Economic problems left unsolved by the private sector typically invite government mandated intrusions in order to harness the favor of the electorate.

Can the RE Industry Still Write its Own Rules

It is beginning to look a lot like the real estate industry will be shaped not by factors we control but by the policies and rules created by others. We, under the mantle of the National Association of Realtors (NAR), have, for the most part, missed most of our opportunity to define and shape the debate and participate in the rules that will create a “New Real Estate Industry.” NAR’s mistaken endorsement of the $700 billion bailout program has hurt us and created a dependency relationship with the federal government. In essence, we have been placed in the unenviable position of a reactive industry rather than a proactive force.

Do we still have the clout and the courage to write our own rules? Do we have the will power, discipline, leadership and the creative inspiration to recognize that we are on the cusp of a “New Real Estate Economy” wherein we can control the rules that dictate how the industry operates within a consumer-centric era? Have we become an industry, like so many before us, that will eventually become reliant upon the solutions created by a bloated federal bureaucracy that is more interested in centralizing power than in actually empowering people?

The Key Principle behind Rule-Writing

It’s not so much the rules per se, that govern business matter as it is the economic and social viewpoints of those who pen the rules. It’s always belief that precedes policy. What we believe about our industry is different that what Washington believes. There are principles behind rule-writing, always!

The key principle behind rule-writing is simply “BE THE RULE WRITER.”

Here are but some of what REALonomics believes will be the “new rules” evolving from the financial policies that will be put in place during what will be increasingly defined by the new Administration as a “crisis.” A history lesson…bureaucracies flourish best when set in motion during “crisis.”

NEW RULE 1: There will be a heavy emphasis on creating a bevy of legislation designed to control each aspect of the mortgage lending process. This sounds good until we understand the difference between our and Washington’s definition of transparency and disclosure. The new set of rules will further slow the markets while everyone waits to see and then create a whole new layer of regulations and regulators operating in the basement of every mortgage lender.

NEW RULE 2: Crack down will be the new operative language for not only Wall Street and so-called “overpaid CEO’s” but also those within the real estate industry who are not fully compliant with Rule #1. REALonomics thinks that real estate brokers will become targets for industry crack down and the eventual police force for compliance with new lending and transaction rules. In his website Barack Obama has already pledge to crack down on brokers and lenders.

NEW RULE 3: NAR will become more and more dependent upon government approval for the implementation of our industry policies and procedures that have sustained us for decades. NAR, already reeling from the DOJ debacle, will have a mandated hotline to Washington and will need to use it to check-in, seek approval and help implement the new rules that will be written. In essence, NAR could become an extension and purveyor of brokerage and home ownership policies written by the Obama administration, Pelosi’s House and Reid’s Senate.

Although the housing industry is suffering and the real estate industry is under siege, REALonomics would like to encourage the industry to step up to the plate and position itself under a new set of operating principles that can be sent to Washington as a demonstration of our commitment to operating and policing our own industry. We are still strong enough to influence the outcomes if we are proactive rather than reactive.

Let’s continue to remind ourselves that the key principle behind rule-writing is simply “BE THE RULE WRITER.”

Get the full transcript of the Barack Obama news conference and read between the lines.

Related posts:

1. Obama, McCain and Real Estate
2. Home Price Declines Hit New Records: What Can the Industry Do?
3. Is the Future of Real Estate in Google’s Algorithm?

Cast your confidential vote for President at iVoteAmerica.com.

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Join the game that has taken America by surprise!

Previous big winners include Wall Street, the Mortgage industry and foreign investors including China and many others. Register today, login and play!

Everyone is automatically a contestant and the stakes have never been higher. Go ahead, put yourself on the line.

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Related posts:

1. The Federalization of our Financial System at your Expense
2. Gekko was Wrong…Greed is Bad
3. REALonomics Launches National Political Blog Network

REALonomics Editorial

We now own what we cannot control. We are witnessing the Federalizaiton of the Financial Systems of America. Backed by a fickle Congress and flanked by Federal Reserve Chairman Ben Bernanke, President Bush and Treasury Secretary Henry Paulson, contrary to their former political beliefs that government should stay out of the private sectors of the economy, took measures today to endorse the Federalization of our money systems.

Q1 - What does this mean to the real estate industry?

Clearly we are entering spooky waters wherein we dared never enter before. REALonomics believes the move by the government will paralyze the industry making home buying and selling incredibly difficult, if not impossible, in some already paralyzed markets. Home and commercial property values will assuredly decline even more, reducing the networth of the industry and its investor and home owner base.

Q2 - What does this mean to the mortgage industry?

Expect huge consolidations greater than the Bank of America’s absorbtion of Countrywide and Merrill Lynch. With this consolidation of the financial titans, mega titans will be created and essentially be required to submit to a new set of tightly regulated lending rules. It will be harder and harder to borrow and lend. This will create a over-regulation of the market and further drag on mortgage recovery.

Q3 - What does this mean to Americans?

Each of the more than 300 million people in America, including those born yesterday, will end up with at least a $100,000 debt hanging over their heads. This is the representative figure that is the accumulation of the current escalation of the national deficit and the new estimated $2 trillion dollar bailout of the financial markets.

The government bailout of the private sector of the market means that each of us was just handed a tax bill or, we might call it a “cash call” because we are collectively the new owners of the private problems of borrows and lenders.

Ron Paul (R, TX) was correct when he told Ben Bernanke, in essence, “you are going to bankrupt the American people with your money policies.”

The average American family is essentially, on paper, wiped out by this move and the impact on the real estate and mortgage industries was just extended to perhap a decade or even more.

Q4 - What does this mean in terms of the election?

This is the easy question and the answer is more finger pointing, more investigations, excessive government snooping (there needs to be some), lots of drama on the political stump and a great deal of harm to John McCain, who is already having difficulty coming out from the shadow of Bush’s foreign and domestic policies.

But it also means trouble for Barack Obama. He can forget about his national health care program for all Americans, he can forget about taxing anyone, much less those earning incomes above $250k and he can kiss his “no-new-energy-if-it-means-drilling-coal fired plants-and-nuclear-power” policy good by.

In essence the damage done to both candidacies is substantial and the next 45 days are going to be like the wild-wild-west as we run up to election time. To vote in the Presidential poll, visit www.iVoteAmerica.com.

The most remarkable thing about today’s move to “take-over” is that it represents a profoundly fundamental shift in our capital market value system and establishes a whole new mechanism for creating a way to further tax the American people. Make no mistake about it, you just got taxed and to pay the tax bill you were forced to financed the payments over time. There was paperwork, no disclosure and no recource for any of us. All of this is taking place right before our eyes without much of a whimper or a voice of protest.

Related posts:

1. Paulson Pushes Bush Plan to Revamp the U.S. Financial Regulatory System
2. Deal or No Deal – Play America’s Game of Chance
3. Restoring a Disrupted Eco System

Because we wanted our faithful readers, authors and commentators to know first, REALonomics is pleased to announce that it has cooperated in spearheading the launch of the iVoteAmerica Network (iVA). iVA is a national polling and blogging network that includes political polling and blogging (Plogging) for all fifty States. The iVA network creates an online political blogging forum for each State allowing people to post to the left, the middle or the right of any issue.

As we have discovered in the last 12-24 months our industry is confronted with many challenge that have us wound up with politics and politicians. With the recent takeover of FANNIE MAE and FREDDY MAC by the Fed, we need to reconsider our ability to influence outcomes by creating voices. The iVA Network is one way we can do that.

The iVA Network incorporates polling as a means of measuring participant opinions on a variety of political and social issues. At its heart iVA is a political blog or, what we call a “PLOG.”

We simply are not vocal enough…we are informed, we vote, we care, but we are not vocal enough in the competitive political arenas. My vision for the iVoteAmerica Network is to simply deliver a political platform for people who vote. Who votes? People who own real estate vote, people who care about the influence politics has over us, our families, our industry and our lives. – Donald Teel, Founder

The iVoteAmerica State Networks

Each State in the iVA Network is its own plog and we are licensing the iVote State Plogs to individuals or groups who want to engage in political blogging, the creation of polls and a balanced approach to allowing consumers to voice opinions.

“We hope that real estate industry professionals will see the connection between politics, the power of our industry and our imperative to influence outcomes. Too often, we are letting others to create voices and control the content and we are then placed in a position of reacting to the babble.” said Donald Teel, Founder of iVoteAmerica.

Each iVote State Network operates under its own domain name (URL), such as iVoteCalifornia.com, iVoteNewYork.com, iVoteKansas.com, iVoteOregon.com, iVoteTexas.com, etc. The iVoteAmerica.com site is the national site that generates some of the polling content and advertising, while allowing State iVote Affiliates to operate their own State Networks independently.

Getting Started with your iVoteAmerica State Network

REALonomics hopes that real estate industry professionals who also have an interest in the political outcomes that shape our industry will consider involvement in the iVote State Networks. Each iVote State Network will be delivered to a qualifying party or entity that would like to build content, opinion and influence over issues at the city, county, state and even national level.

Want to find out more? Call iVoteAmerica toll free at 1-877-380-1000 for details or, if you prefer you may submit an online request for information through email or summit through the iVoteAmerica Contact Form.

Related posts:

1. Deal or No Deal – Play America’s Game of Chance
2. Voting Influences Outcomes
3. REALonomics on CityBlogUSA

Can the 2008 Housing Act Stabilize and Turn the Real Estate Cycle Around?

Who would have only 5 years ago expected that we would be staring down such complex and turbulent times in real estate?

Last week, President George Bush signed The American Housing Rescue and Foreclosure Prevention Act of 2008 (the Housing Act) into law. It is the most sweeping housing legislation since the Great Depression. The new Act authorizes the Department of the Treasury to stem the tide of home foreclosures and provide a lifeline to mortgage lenders. With inventory in many large cities sitting at almost a one year level, and foreclosures expected to surpass 6 million by 2012, they have a huge task ahead.

Related posts:

1. Obama & a New Real Estate Industry
2. Is the Future of Real Estate in Google’s Algorithm?
3. Real Estate Recovery Quo Vadis?

Here is the official scripted response by NAR from Vicki Cox Golder, 2008 NAR First Vice President & Laurie Janik, NAR General Counsel. NAR President Dick Gaylord is also featured here.

Related posts:

1. Bill Gates – ’92 Predictions
2. DOJ & NAR SETTLE SUIT – It looks like everyone’s coming up roses!

REALonomics believes real estate markets follow a distinct business cycle, characterized by forced change brought on by new technology advancements that redefine how the industry creates and sustains ROI. We are in what we call a “consumer trough.” The bottom occurs somewhere during this trough and the change will only be seen with the introduction and adoption of new business models that facilitate market accelleration.

REALonomics stands by its analysis that the real estate housing market fluctuates in accordance with “Power Cycles” and the next one will occur sometime in 2011; See the REALonomics Power Cycle analysis.

Copyright © 2008, MSNBC.

Related posts:

1. Big Bucks Realty: A Crowded Aquarium

Upon his retirement from Microsoft, REALonomics is honoring Bill Gates and his contributions to business and of course, who could question his influence on the real estate industry? Here’s a video from 1992 with some of Bill’s predictions.

Related posts:

1. Brokaw Chats with Bill Gates
2. Bill Gates: Last Day at the Office
3. Is the Future of Real Estate in Google’s Algorithm?

Through video REALonomics salutes Bill Gates for his contribution to business and indeed, who can deny, the real estate industry itself.

Below is Tom Brokaw’s interview with Bill Gates about his exit from Microsoft, his influence and his future in philanthropy.

Related posts:

1. Bill Gates – ’92 Predictions
2. Bill Gates: Last Day at the Office
3. Is the Future of Real Estate in Google’s Algorithm?

REALonomics Editorial

There is an old saying, “After all is said and done, more will be said than is done.” The long battle between the Department of Justice (DOJ) and the National Association of Realtors (NAR) was declared “settled” today.

Not so fast! After a reading of the Final Judgment document, REALonomics offers the following cursory observations:

• THE GOOD: NAR cannot prohibit the distribution of full MLS listing information;
• THE BAD: Local Associations cannot engage in unique policies about local listing distribution;
• THE UGLY: NAR must report to the DOJ quarterly…this ain’t over, folks;

After all has been said and done, more has been said…and spent…than done with respect to how the real estate industry under the leadership of NAR has moved from its control model to a transparent model that will unleash the kind of innovation and consumer-centric services we need.

Furthermore, the DOJ has now completed one of its central objectives, to position itselfself as the sole arbiter of real estate property information access, all local associations and members of NAR and more importantly, as we have said before, to eventually control services and commissions.

Mark this down and highlight it: When the DOJ does anything under the banner of “public interest” there is a north and south point of reference, depending on one’s facing. Decide for yourself what this important section of the settlement might mean to the industry, long term and short term (highlights ours):

The big loser here is actually the industry itself, the thousands of broker/owners and yes, temporarily, even the consumer. NAR will remain under the DOJ microscope for some time to come. This entire debacle, we predict, is the precursor to mandated services and commission control. In this case, we hope to be wrong. The solution, we have long contended, is a reinvention of our models, how we use and distribute property information and finally, how we best serve the consumer, our ultimate client.

The settlement serves no real purpose yet! It’s just more of the same old square dancing between NAR and the DOJ. But watch out when people say it means nothing fail to see the overall DOJ strategy fuel by anti real estate indutry sentiment from consumer watch dog groups.

PRINCIPLE: It’s about the MONEY, stupid…commissions. This is just the beginning of a long death march toward more national scrutiny. We are going to tango with the DOJ again. This is not really about VOWs and property information. It truly is about US, the industry and our practices that smell of control and dominance and to quote the DOJ, anti-trust inclinations.

BIG WINNERS: The non-brokers, non-industry innovators and the neo-brokers are the big winners here. The “judgement” is a precursor, nothing more, nothing less. It’s the swinging open of a previously locked door so that we can see what’s on the other side. It’s what lawyers call “precident” and “legal trending.”

BIG WINNERS: Transparent advocates. It will be impossible to thwart the Democratization of Real Estate in an ultimate sense. This decision is like a strand of DNA but not the entire structure.

True, NAR may now face restrictions on its traditional control tactics but there’s more to the story when we recognize that competitors are waiting in the wings to bring open-sourced property information models to the forefront by empowering property owners to do whatever they please.

Our issue as an industry remains completely unchanged. Why haven’t we been able or willing or both to reinvent this industry into a vibrant, consumer-centric model that both empowers users and delivers adequate and sustained profit to broker/owners. The short answer is we don’t know how to do it!

For now we will simply continue the NAR/DOJ dance until one of them collapses. Does anyone think the DOJ will collapse?

READ THE Final Judgment.

Related posts:

1. NAR Explains DOJ Settlement