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Posts Tagged ‘realtors’

Home Sales Even Worse Than Reported Says the Primary Agency That Reports Them

Far fewer homes have been sold over the past five years than previously estimated, the National Association of Realtors said Tuesday.

That’s from a CNNMoney.com report by Blake Ellis.

While NAR hasn’t revealed exactly how big the revision to home sales will be, the agency’s chief economist Lawrence Yun said the decrease will be “meaningful.” …

Yun said the database NAR uses to track existing home sales, the Multiple Listing Service (MLS), has led the real estate agency to over-count existing home sales for several reasons.

The MLS database only includes home sales listed by realtors, and excludes homes listed by owners, providing a very narrow view of the market. And because more people are using realtors to list their homes instead of selling them independently, realtor-listed sales numbers have become artificially inflated, said Yun.

I cannot make sense of that last paragraph; can anyone else?

FWIW, back in 2007 we ran a Quorum on this blog asking the question “Is it time to believe in the housing bubble?” Lawrence Yun was one of the respondents:


Want to Jump-Start the Housing Market? Get Rid of the Realtors!

Okay, okay, that’s not quite the message of a new working paper by Panle Jia Barwick and Parag A. Pathak called “The Costs of Free Entry: An Empirical Study of Real Estate Agents in Greater Boston.” But for those of us who have thought about the Realtor’s role in the housing market, it’s tempting to jump to that conclusion. Here’s the full version of the study, and here’s the abstract:

This paper studies the real estate brokerage industry in Greater Boston, an industry with low entry barriers and substantial turnover. Using a comprehensive dataset of agents and transactions from 1998-2007, we find that entry does not increase sales probabilities or reduce the time it takes for properties to sell, decreases the market share of experienced agents, and leads to a reduction in average service quality. These empirical patterns motivate an econometric model of the dynamic optimizing behavior of agents that serves as the foundation for simulating counterfactual market structures. A one-half reduction in the commission rate leads to a 73% increase in the number of houses each agent sells and benefits consumers by about $2 billion. House price appreciation in the first half of the 2000s accounts for 24% of overall entry and a 31% decline in the number of houses sold by each agent. Low cost programs that provide information about past agent performance have the potential to increase overall productivity and generate significant social savings.


Finally, Some Love From the Real Estate Industry

While it may be true that we have no fans at the National Association of Realtors, at least there is someone in the real estate industry — a commercial leaser in Memphis — that likes us. Enough, at least, to rip us off. I have to say, I really like the subtle shadowing they did on the book title; it’s . . .


Freakonomics in the Times Magazine: Payback Time

In their June 10, 2007, column for the New York Times Magazine, Dubner and Levitt present some interesting new research on real estate sales. No, it’s not what you’re thinking: more Realtor bashing! Although it is true that they have written before about the imperfect nature of the Realtor’s commission model, this column takes a somewhat different tack. It’s about a little-known trick known as a cash-back transaction, in which a buyer receives a “rebate” to finance his own down-payment – a rebate that the lending bank never finds out about. This blog post supplies additional research materials.


How Much Is a Realtor Worth?

We’ve got a column appearing in the June 10 issue of the New York Times Magazine, which is a special issue on the U.S. wealth divide. Our piece deals with some interesting new research on real-estate sales (more on this later today). I know what you’re thinking: more Realtor bashing! Well, no. Even though we’ve written various things about the . . .


This Week In Reader E-Mail

Rarely does a reader express his sentiment so cogently as in this case, from one “Fred Peck”: Your article that tries to shed light on Realtors is probably the dumbest and most pointless thing I have ever read. Rogue economists, huh? You idiots sound more like cynical morons that think they know everything. I guess I’m the fool, though. You . . .


Meet the New Realtor: Google

Although it is in a fairly primordial stage, this new home-finding tool from Google may turn out to be as formidable a challenge to Realtors as the Department of Justice. It does little more than aggregate public information (as is Google’s wont), but when the public information in question is the listings of homes for sale in any given city, . . .


Academic Research on Realtors Confirmed by 1983 Novel

A reader named Gerard Mulligan was good enough to let us know that a 1983 novel he was reading, Scenes From Later Life by William Cooper, contains a passage that, if the section from Freakonomics about real-estate agents were ever made into a film, could practically serve as the script. (If the film were British, that is.) Check out the . . .


More Bad News for Realtors, Part 819

I like to stop by the National Association of Realtors’ blog now and again to see what the N.A.R. is making of the many changes in real estate. A recent posting referred to a Harris Interactive poll from July in which people were asked to rate the prestige of various occupations. Firefighters were No. 1, while nurses, teachers, and military . . .


This Is the Sound of Chinks Appearing in Armor

There have been many discussions on this blog, probably too many, about Realtors. (Click here or here or here, or, if you’re really twisted, just type “Realtor” in this page’s search box.) The gist? The National Association of Realtors has done a great job protecting its members but at the expense of allowing homesellers and buyers to enjoy a truly . . .


Note to Realtors: You May Want to Skip This One

In the interest of not piling on, I was initially reluctant to mention this working paper, posted on the AEI-Brookings Joint Center for Regulatory Studies website, about the flaws in the commission structure used by Realtors. Especially since its author, an attorney for the federal government named Mark S. Nadel, cites our book as well as a more recent article . . .


Can’t Take a Step Without Meeting a Realtor?

In New York City, at least, it sometimes seems that way. Not long ago, we wrote a column about how a real-estate boom actually lowers median Realtor income because of all the new agents who rush in to join the boom. Homethinking.com, a new website that allows customers to rate Realtors, has posted an interesting item on Realtor density. It . . .


Pity the Payday Lenders

I recently got an e-mail from someone who works for the Community Financial Services Association, the national trade group of payday lenders. She is unhappy that Congress wants to put a cap on the rates that payday lenders can charge. The proposed cap is 36% APR. If this legislation were passed, the CFSA woman writes, “Payday advance lenders could not . . .


The National Association of Realtors is right about this

I gave a speech at the PCBC builders conference earlier this week which Glenn Roberts, Jr. summarizes on the Inman News blog. (The link is to a subscription site, unfortunately. I could get to the article yesterday, but today it asks for a login.) In his article I am quoted as saying that the N.A.R. lawyers threatened to sue me. . . .


What Do the Natl. Assn. of Realtors and Genghis Khan Have in Common?

Nothing, except for the fact that I’m going to write about both of them here. A couple weeks ago, I posted about Thomas Robinson, an accounting professor at the University of Miami who, through ancestral DNA testing, had been deemed the first American to be able to genetically claim to be a descendant of Genghis Khan. Well, it turns out . . .


More Realtor News

The National Association of Realtors has more than its fair share of adversaries, including the U.S. Department of Justice (which is suing the N.A.R. for anti-competitive practices) and the Consumer Federation of America (whose executive director recently told the N.Y. Times what he thinks of the N.A.R.: ”Because the industry functions as a cartel, it is able to overcharge consumers . . .


Realtors Get a Blog

The National Association of Realtors has started a blog. The lead item today is headlined “The Cost of Selling without a REALTOR?: $31,800.” Pretty scary, huh? Here’s the lead: “Real estate professionals do more for sellers than make the transaction easier. They make them money. In fact, the average seller who uses a real estate professional makes 16 percent more . . .


RealtorsRealtorsRealtorsRealtors!

Because we wrote this article, a lot of people are visiting this Web site to get our e-mail address to write in various comments. I’d suggest anyone who does so should feel free to post comments here so that everyone can see them.


Those Poor Realtors

If I were a Realtor, I might feel right about now that the entire free world has turned against me, having decided I’m a sharp-elbowed, greed-driven hustler trying to preserve an advantage that I don’t deserve. And I’d probably be right. In today’s New York Times is yet another chronicle of how the National Association of Realtors has used its . . .


More Bad News for Realtors

As we wrote in Freakonomics, Realtors are incented to use proprietary information to the disadvantage of their customers. (Don’t be so smug: you probably would too if you were a Realtor.) The National Association of Realtors once yelled at us for discussing this situation on TV. Now the N.A.R. has a new and far more powerful enemy: the U.S. Department . . .


Not to Kick Realtors When They’re Down, But …

In the Freakonomics chapter about real estate agents’ informational advantage, we discussed the different terms that agents use in want ads, and those terms’ correlation with higher or lower sales prices. Alas, there was one kind of information — whether or not a murder was committed in the house, for instance — that didn’t make the dataset. Here, however, from . . .


Sometimes Real Estate Agents Take Money from Homeowners the Old-Fashioned Way

My colleague Chad Syverson passed along the following news clipping, although as a native North Dakotan, he swears this sort of thing would never happen in North Dakota (only in Moorhead, Minnesota which is right across the state line): Former Realtor ordered to pay fine for attempted theft By Amy Dalrymple The Forum – 06/10/2005 A former real estate agent . . .