December 19, 2011: Ho ho ho! On December 21st, the National Association of Realtors (NAR) will gift the nation with the true number of existing home sales between 2007 and 2010. The NAR's inflated numbers were flagged earlier this year by CoreLogic, a California based data firm. When confronted, the NAR grumped they'd look into it. Sounding more like dwarfs caught mining fool's gold than housing helpful elves. Several seasons have passed. Now, a few days before Christmas, when most people pay scant attention to news, the NAR will be giving us a wee bit of truth. How holiday special is that? Scrooge's transformation pales by comparison.
Like Scrooge, the NAR (rhymes with guar, which when partially hydrolyzed is fully fermentable in the large bowel) had to be coerced into transformation. With CoreLogic its Ghost of Christmas Past.
Speaking of the past, though the Washington/Wall Street nexus (On Fannie, on Freddie, on Banksters and Brokers!) financially powered the housing bubble that led to the economic crash, Realtors were the relentless boots on the ground. Threatening folks that if they didn't buy now they'd be forever priced out of the housing market. Evoking an eternity of rental serfdom under Landlord Potter. As opposed to an eternity of low or no equity mortgage serfdom under Banker Potter.
Then there were NAR TV ads. Such as the 2007 gem claiming "when you have a family it's always a good time to buy". Underwater families are yukking over that one. Or how about the 2008 tout for Uncle Sam's $8,000 first-time homebuyer tax credit? The break that suckered the last clueless buyers into paying still-inflated housing prices, jacked mortgage fraudsters posing as first-time buyers, and according to many Realtors (now) prolonged the housing crash. And the ads keep coming...
During 2011, reforms limiting government backed housing programs that leave taxpayers holding the bag for mortgage failures and related bailouts have been kicking around Washington. At the same time, the NAR has been blitzing the airwaves with a fear monger pitch featuring a Norman Rockwell grandpa fretting about "the dream of home ownership being threatened". Then there's their “Public Awareness" campaign which champions the housing industry as job creator. What pol with elections looming could resist that?
Not that many pols ever resist the NAR. Its lobbying clout makes pols go all wobbly in the large bowel. For years, the NAR has beat back wave after wave of legislative reforms that threatened to reduce taxpayer exposure to housing-related risk.
Still, NAR concern re job creation is admirable. Many of the jobs that flow from housing are in the unionized construction trades, the last bastions of middle class wages for America's blue collar workers. The worker-friendly NAR recently made Bill Malkasian, former head of the Wisconsin Realtors Association (WRA), their Vice President of Political Strategic Planning. When head of the WRA, Malkasian threw the group's full weight behind union-busting Governor Scott Walker. The Koch brothers gave big to Walker, but the Wisconsin Realtors Association gave more. In his new position Bill Malkasian will be in the NAR field, leading political strategic efforts at state and local levels all over the nation.
By the buy, Bill's new job is part of the NAR's atta-boy response to the U.S. Supreme Court ruling that corporations and other entities have the same political speech rights as individuals and can spend as much campaign cash as they wish.
The NAR has other reasons to be cheerful. As 2012 draws nigh, its leaders are making their annual Happy Days Are Almost Here Again predictions. Plus, the NAR is based in the USA not the Peoples Republic of China.
In China, underwater homeowners are doing more than seeking interest write downs or living rent free while awaiting foreclosure. The “fang nu” (housing slaves) of China's housing bubble are storming the gates of real estate heaven.
The Los Angeles Times, in its December 13th article China's housing bubble is losing air, describes a revolt of the fang nu in Shanghai. Condo buyers who'd been told by salespeople that “prices wouldn't go down” became enraged when the project's developer (China Vanke Co.) slashed purchase prices by 25% for later buyers. The condo cadre trashed the sales office and tussled with employees. It took the police three days to quell the protest. Cities including Shanghai and Beijing have had at least seven similar uprisings in three months, in which mobs “destroyed real estate offices and demanded refunds of up to 40%”.
According to the New York Times (Village Revolts Over Inequities of Chinese Life, 12/15/11) as many as 180,000 “mass incidents” have taken place in China over the last year. There are numerous reasons for the uprisings. But a prime cause is another twist on the real estate game--
“...the seizure of land by well-connected private developers or government officials, which invariably involves forced evictions for meager compensation....these seizures are supported by local governments that have come to rely on proceeds of land sales and development to pay for day-to-day operations.”
A familiar scenario to anyone who followed the rise of eminent domain abuse during the U.S. housing bubble daze. When moderate and low income property owners discovered their neighborhoods had become land-grab goldmines for pols, planners, and developers. Justification? Revitalization by any means necessary.
Like Mao once said, “Real estate is not a dinner party”.
OK. Mao Zedong aka Mao Tse-tung aka the Great Helmsman of the Peoples Republic of China till 1976, didn't really say that. He said this:
“A revolution is not a dinner party, or writing an essay, or painting a picture, or doing embroidery; it cannot be so refined, so leisurely and gentle, so temperate, kind, courteous, restrained and magnanimous."*
If you substitute “real estate” for “revolution” Mao's words could come from a sales motivational speech. One which would wrap with the threat that coffee (or tea) is only for closers.
Carola Von Hoffmannstahl-Solomonoff
*From Report on an Investigation of the Peasant Movement in Hunan
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