I’ve spend the morning deconstructing her article because it’s really hit a hot button for me. Her concluding question — Why did so many people, including Realtors, buy homes in 2005? — has been and will continue to be the basis for innumerable blog posts, talk show interviews, research by economists — imagine what the authors of Freakonomics could do with this confession — not to mention parodies on Saturday Night Live and YouTube.
There is more work still to be done. Personally, I’d love to see investigative reporters dig into the conflicts of interest in the real estate industry and expose how deceptive and manipulative business practices, like dual agency and bidding wars, fanned the flames of “irrational exuberance and, as Teresa’s article admits, ultimately burn Realtors themselves.
Perhaps industry regulators will create new disclosures to protect consumers and prevent another trillion dollar collapse of the housing market in the future. For example, buyers are routinely advised to ask agents about their sales volume, but what if they asked prospective buyer agents if any past clients are upside down on their mortgages or involved in foreclosure? What if a “foreclosure disclosure” were required by law?
Outrageous and unrealistic some might argue but blogs have already created a decision-making tool for web-savvy home buyers to decide who will best protect their financial interest. Try this experiment, visit two real estate blogs and see what they’ve written about the housing bubble. Go back to 2005, were those two prospective advisors echoing NAR’s “anti-bubble” spin or warning homebuyers about the coming meltdown?
Compare what Teresa was blogging about in November & December 2005 to The Real Estate Cafe’s history of blog posts about the real estate bubble. In retrospect, this April 2005 blog post sounds prophetic: Will mobloggers pop the real estate bubble?
My hope is that Teresa’s admission that Realtors are not immune to foreclosure will expand discussion about systemic flaws and conflicts of interest in the residential brokerage practices, and their cost not just to individual buyers and Realtors but to society. Who could imagine a better time and place for some “straight talk” about the need for reform than the eve of John McCain’s speech at the Republican Convention right there in Teresa’s backyard?