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Are realtors becoming more realistic?
A 'sold' sign stands outside a home in Pasadena, Calif.
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TEXT OF STORY
Steve Chiotakis: There's been some criticism aimed at the National Association of Realtors for acting too much like a cheerleader during the height of the housing bubble. The organization's previous chief economist stepped down after his rosy picture of the economy clashed with reality. So has the industry changed its sales pitch? To find out, Marketplace's Jeff Tyler recently attended the group's national convention in San Diego.
Jeff Tyler: Realtors have a way with words. That's how a window looking out on industrial smokestacks gets described as a "panoramic view." They always find a bright side.
That was true when I asked realtor Susan Herrick from Ventura, Calif., if there's ever a bad time to be in real estate.
Susan Herrick: Uh, when your escrow doesn't close. Haha. But, no, it's always a good time.
But the leadership at the National Association of Realtors is more reserved.
Lawrence Yun: People should not say,"Buy, Buy, Buy!" at all times. I think that's irresponsible.
That's the association's chief economist, Lawrence Yun. He's not suggesting that the National Association of Realtors bears any blame for that "Buy, buy, buy" mentality. But Yun says realtors should challenge over-eager consumers.
Yun: If the consumers are trying to stretch their budget, it's for the realtors to perhaps calm their enthusiasm, to say, "Stay within the budget."
NAR's president elect, Ron Phipps, downplays the association's role in helping to inflate the housing bubble.
Ron Phipps: While we may be very confident -- and maybe on occasion we're exuberant about the opportunity -- it really was a national enthusiasm about ownership and the opportunities.
Phipps says the association still sees opportunities in this market, but its tone has become more cautious.
Phipps: We're encouraging people to buy houses they can afford. We've done that, but without as much discipline as we probably could have had in the past.
Looking forward, Phipps says:
Phipps: We believe that the future, based on our immediate past, looks really, really good.
Just don't call him "optimistic."
Phipps: Optimistic? No. We're pragmatic.
Others see "optimism" as a necessary characteristic in the job description.
Yvette Gamet is a realtor from Orlando, Fla:
Yvette Gamet: You have to be optimistic. You have to be smiley and give the good news the market is perfect.
Housing markets are far from perfect. The number of foreclosures is expected to increase in the short run.
And economists are concerned about a double-dip recession.
Still, the National Association of Realtors predicts home prices could rise by 3 [percent] to 5 percent next year.
Though for some parts of the country, that's optimistic.
I'm Jeff Tyler for Marketplace.
I agree with Martin's comments. There are too many gotcha's in every deal that's out there. Real estate is no different. Buy if you need the house (and are willing to pay MORE than renting). don't buy because you think it is an "investment".
So-called Realtors are supposed to have some kind of ethics, but apparently it has not extended to telling people that in the long run, house prices rise with inflation, but no more.
Still, they are not dishonest, any more than the insurance agent who sells an overpriced "ordinary" life insurance policy to a young couple who can barely afford the term policy they badly need.
Or the financial advisor who sells worthless predictions and tries to get control of one's portfolio and a 2% yearly fee. Let the buyer beware! It's tricky out there.
