NAR Makes Fools of its Members

By Dave Fratello | November 12th, 2007
Sunday's LA Times carried a sappy, angry full-page ad by the National Association of Realtors.

Sappy, because an ad that purports to be about persuasion also tosses in a pic of a cute little kid on a tree swing. Frankly, we like for our hearts to be tugged in emotional ads, and for our brains to be exercised in persuasion pieces.

Angry, because the Times ad lashes out at "misinformation presented in the national media," but, alas, we never learn what, exactly, is wrong with the popular drift on the housing market.

The apparent purpose of the NAR ad is to persuade a sidelined, would-be buyer that it's a good time to buy. Oh, high hurdle! (Click here for the "national" version of the full-age ad [PDF download], or here for TV spots and other print ads, courtesy of NAR.)

Interestingly, last year, NAR's pitch was that it was both a "great" time to buy and to sell. This year, not so much emphasis on the "great time to sell."

You might think that a part of the pitch to a potential buyer now would be that prices are dropping, that it's a buyer's market, that you have both time on your side and your pick of the active listings.

But no, no, no, that's not going to be NAR's pitch, because realtors' #1 clients are sellers. Everyone needs buyers to make the game go, but you don't go out there broadcasting the news that prices have gone soft.

The NAR ad does indirectly acknowledge home price declines, and the fear of price declines to come. (The latter being the #1 reason not to buy now.)

NAR would like you to think, instead, about how home ownership is "a great way to build long-term wealth." So, please, don't worry that your hard-earned down payment of $50k, $150k, or $500k could go "poof!" in the next few years, because, long-term, you'll be fine.

NAR allowed for some local tailoring of its ad, and that is where the LA Times version got clunky and bizarre. The best way to show this is to first contrast the original copy with the local copy:

Sixty percent of the average homeowner's wealth is their home equity. Very few people look back and regret their decision to purchase a home. Historically, homeowners that are in it for the long haul will build equity. In fact, home equity is the largest single source of household wealth for most Americans.


The Los Angeles housing forecast is better than reported. You might wonder if buying a home is a smart financial decision these days, given some of the misinformation presented in the national media. Your local realtor associations want you to know that in the second quarter of 2007, over 22,000 homes were sold in the Los Angeles area. And there's even more good news – home values were up 2.9%, compared to August 2006.
We prefer the national version.

There is no L.A. "forecast" offered here. The data all come from the second quarter of 2007, and duh, any buyer – well, c'mon, everyone – knows things changed a lot somewhat after the second quarter. (We can't explain the Aug. 2006 reference; the footnote is to Q2 data, apparently a mistake.)

How dare NAR scold others for "misinformation" before pretending that useless statistics should change buyers' perspectives? If you fail to prove your point, you just look like you don't know what you're talking about.

In other forums, NAR has begun acknowledging the difficulties in the market. For instance:
The National Association of Realtors reported ... that sales of existing homes fell 8 percent in September, the largest decline to show up in records dating to 1999. The seasonally adjusted annual sales rate of 5.04 million existing homes was also the slowest pace on record. [emphasis added]
How about the recent 5.7% drop in year-over-year median prices in LA County (according to Case-Shiller/S&P)? How does that relate back to those 2nd-quarter data?

There's also a steady drop in median list prices in LA County, down 10.6% since this time last year, according to Housing Tracker.

If NAR – and, most particularly, its local affiliates – are trying to say that the local market is stronger than others say, they're failing. Instead, they're making every local realtor member look like a liar and a fool.

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