Phillip's Blog

Catchy title isn’t it? I must confess that I saw it the other day in my HOA newsletter and the value of it hit me immediately. That’s where the similarity ends though. The rest of the content here is absolutely original.

So, what do I think? I think there should be more positive news in the papers than we have today. I think the press has focused us so heavily on the negatives of the current housing – mortgage – credit recession that we are just beaten down – psychologically.

I think I remember the paintings of the buffalo herds on the great plain of the western US in the 1870’s. You know the ones…where the dense herd moves as a single wriggling, gigantic, black mass being driven by yelping Indian hunters on horseback, firing arrows into the herd. The hunters skillfully driving the herd toward the rapidly approaching cliff, over which most fall to instant death. The buffalo follow one right behind the other with never a thought that blindly following the animal ahead might lead to a disastrous outcome. Instead they run together, surging on and on and on until finally their simple lives end at the bottom of the cliff, becoming winter’s sustenance for the hunter tribe.

I think I notice distinct similarities between the buffalo herd and the mentality of today’s consumer. I think we are being driven toward the cliff by the Indian hunters and we are mindlessly following the buffalo in front of us, with never a thought of the possible outcome. Just as the buffalo, we look to the left to see the yelping hunter and we panic. Not because the hunter is genuine threat, but just because others in the herd are panicking. So we run toward the cliff, even though we have seen the cliff before and intuitively know that running in that direction will surely lead to disastrous results. I think we do so because we have no leadership to warn us that doing so will end our existence and we have no spine to realize the view can be so much more than the hind quarters of the animal in front. I think buffalo butt is not where I want to focus my attention.

I think I am sick and tired of hearing the endless armchair quarterback analysis of the talking heads on TV. I think I want to scream at them to shut up and go back to work. I think those that can, do, and those that can’t go on TV and TRY to teach the rest of us what to think about the situation. Yet we refuse to remember where the cliff is located and persist in running blindly toward it.

I think the facts are that of the 120 million homes in the US over 33% of them are completely paid for and have no mortgage. I think that 40 million of the remaining 80 million homes in the US were bought before the year 2000, meaning that even in a “fire sale” the equity in those homes is at least 30%. I think I know that 94% of all the mortgages in existence today are not behind at all. Of the 120 million homes in the entire US today, only 4 million are “at risk” with less than 2% of all homes actually in foreclosure. I think congress is about to spend $300 billion (yes, that Billion, with a capital “B”) of YOUR tax dollars to bail out those 2% of home buyers who made bad decisions. Yet the talking heads would have us believe that, like Chicken Little, the sky is falling and we all have to run for cover or risk getting smacked by falling houses.

So we keep looking to the right and looking to the left and looking in front and deciding that…well…everyone else is headed in this direction so it must be the right way to go. And the cliff draws nearer and nearer.

As you certainly have realized by now, I am always casting about for items of interest to voice my opinion about, especially when it comes to the internal workings of the real estate industry.

Naturally I couldn’t help but comment on The National Association of REALTORS® (NAR) recently released 2008 Member Profile Report. This annual state-of-the-state reveals a number of interesting statistics about our industry, compiled from the previous year, much of which completely blows up common misconceptions harbored by many among the general public.

Here’s an example: according to the report, almost 21,000 members obtained one or more professional designations in the last year, with over 33 percent of all members now having at least one advanced designation (the equivalent in some cases of a graduate degree). Attaining professional designations means a lot of extra education work that the agent sees no immediate income for – and rarely do they receive any reimbursement for it either. What industry can you name that lives and dies on continually educating itself, without the promise of immediate income from it, or corporate support for it? The answer would be “none.”

The other big myth is that REALTORS® make a bunch of money. Sadly, in 2007 the median income slipped to $42,600 down from $47,700 in 2006, with licensed brokers and sales agents earning a median of $65,200 and $31,000, respectively. The median income was $69,500 for those in the field for at least 16 years, $52,000 for those with six to 15 years under their belt, $34,600 for those with three to five years in the industry, and only $10,500 for those with two years or less experience. This below-the-poverty-level wage might explain some of the turnover in our industry. If you have to go TWO YEARS to break the $11,000 income barrier, it’s no wonder that many agents have to seek out alternative income streams.

Despite the low income, REALTORS® are almost universally technically competent. The survey reveals that 92%of Realtors use e-mail just about every day, 88% employ computers, 82% use cell phones, and 60% have personal Web sites. Additionally, 34% use Internet-equipped smart phones, 27% use digital cameras, 19% use GPS devices, 18% use instant messaging, and 15% use PDAs. I think that compared to other industries, we as a group are extremely competent – despite the low wages to help pay for that technology.

Sadly, the survey also reveals a slight drop in membership of 1.5 percent from 2006, though NAR still boasts over 1.2 million members; related no doubt to some of the issues above.

An Interesting Footnote: At the NAR Midyear Conference last week, it was reported in one session that, in 2007, of the association’s 1.3 million members nationally, 500,000 did NOT share in a single transaction during the year!!!

So what does all this mean? It focuses the point that when you hire an agent, you need to ask the hard questions about their experience, knowledge and expertise. The wages are low, technology demands are high. Can the agent you pick deliver both?? Or is it even possible to deliver both? Are they not an oxymoron (meaning diametric opposites)? All rhetorical questions of course, but stuff that needs to be discovered in your process to uncover the agent that best fits your needs.

In 2007 our team closed nearly 65 transactions for a volume of almost $37,000,000. All of our team members are full time and experienced agents. Serious business people with a true passion for what we do. The type of people who are excelling in this market, constantly improving their skill set and winning at this game we call Real Estate!

Ask us the hard questions. You may be surprised by the answers.