NAR Convention - a well-placed hand grenade ...
Having just returned from Sin City (Las Vegas) where I tried desperately to adhere to the rigorous conference schedule that I set for myself, trying to stay focused while competing with the likes of 30,000 other realtors with those same intentions, I soon found myself contemplating the daily plight of cattle -- eternally doomed to travel in herds. My next thought was that a well placed hand grenade would go a long way toward solving the vexing problem constantly referred to as the "abundance of competition" we face as we set about to earn a living -- just kidding, of course. Oh well, I digress.
Featured at the conference were both the current and former Chief Economists of NAR, Lawrence Yun and John Tucillo. They had a tough act to follow. They "starred" in the Blue Man Theatre of the wildly extravagant Venetian Hotel, site of the convention. Despite having to overcome a certain lack of "star quality" both fared well. The subject of their presentations, on balance, was not pretty -- a continuingly grim forecast for the housing industry. Despite that, they managed to shine a few bright lights into the darkness.
First the Cons:
This is the first year since the Great Depression to register a nationwide decline in median home prices, Yun said. His latest numbers put the drop at 1.7%. In other words, prices nationally will be flat, Yun said, as buyers react to gloomy housing and industry news by sitting this one out.
The impact of the Sub Prime credit crisis has just begun to be felt. The brunt of blame must be borne by Wall Street with their preoccupation for exotic financing vehicles such as LDO's and CDO's, whose true value remains a mystery today. Oh, we can't forget those unscrupulous mortgage brokers. It doesn't help that mortgages are typically sold shortly after closings, then pooled with similar debt instruments, further muddying the waters, all of which has tended to inflate the value of these portfolios. Now we are pay the price.
Now the Pros:
Yun is predicting a slightly improved sales climate in 2008--if 0% appreciation can be considered an improvement.
Tucillo is offering some measurements to watch going forward. We are to keep our eyes on things such as Days on Market (DOM) and Average Sale Price (ASP) as % of Ask Price. As DOM goes down and ASP goes up, things get better. These two, in particular, will give us a trend to cling to going forward.
All that really matters is that real estate is intensely local. National trends serve little purpose other than as a benchmark against which to compare our local market. For more about the relative health of our local market, check out two other recent posts on this blog. Lawrence Yun's (yes, him again) recent address to the Jeffco Board of Realtors and a recent update from our showing service, RERC. Both will serve to add wattage to that little beacon of light previously referred to.
As for the experience gained from the convention, as a well known phrase goes, "it was priceless". Now, for the venue itself, and associated routine, I can only say, "It's good to be home." One week shuffling back and forth with 30,000 realtors is not my idea of a good time. In this particular context, it certainly gives new meaning to the popular phrase "What Happens in Vegas, Stays in Vegas." So be it!