A letter to the editor printed in the Mahwah Suburban News, written by William P. Deegan Jr.
After opening the [Aug. 19] Mahwah Suburban News, your [real estate section] item’s large headline, “Local real estate market sales jump 17 percent” took me by surprise. The day before, The Record’s headline (and widely reported elsewhere) read “Sales of Existing Homes Plummet 27.2 percent fall in July largest since 1968.”
Why the discrepancy? Your article quotes statistics from May 2010 when the effects of the government tax credit were just starting to wane. In other words, coming on the heels of the very different and widely reported national July figures the day before, the information you report is very misleading. I doubt that northern New Jersey was immune to the realty downdraft. USA Today reported that the New York/New Jersey/Long Island area was down 24.9 percent in July compared to 2009.
Looking further at the “news article” one can see that it is really an promotional piece for a New Jersey realtors association seeking to drum up sales with their ever popular “it’s a great time to buy real estate.”
Mahwah Suburban News should practice better journalism and label advertising and promotional pieces as such.
From the Big Picture:
We have had a god-awful run of Housing data. New and Existing Home Sales, Defaults and Foreclosure data, even the Case Shiller report — all have been utterly horrific.
In light of this, I want to make the following announcement: Attention RE Agents! The National Association of Realtors are doing you a terrible disservice.
In other words, mislead the public with spin. Create false hope. Lie. This agent was defending the National Assocation of Realtor’s blatant dishonesty — a mistake on its face — just as the damage they did began to have an effect.
What the NAR was offering to buyers, sellers, their agents, indeed, anyone involved with Housing, was the blue pill.
The sort of nonsense the Realtor’s group peddles helps explain why sellers have incorrectly believed a recovery was imminent, even as housing went through a historic collapse. It is why home owners incorrectly still expect their homes to go appreciate by 10% a year.
These false beliefs have real world consequences. They create ridiculous expectations among sellers, who selectively grab onto any positive news they can. They choose the temporary blissful ignorance of illusion — that damned blue pill — versus embracing the painful truth of reality (i.e., the red pill).
This confirmation bias leads sellers into mis-pricing the value of their homes. They have been a season or even a year or more behind the pricing curve the entire way down.
Ask any listing agent how difficult it is to get sellers to become realistic in their asking prices. Real Estate agents would be moving a helluvalot more houses if they were not fighting misinformation that the NAR has put into the marketplace. Many, many agents have confirmed that, even in this crummy environment, a good house properly priced will sell.
Here’s a question for you reality (vs NAR realty) agents. Ever wonder why you seem to be having such a hard time convincing sellers to set reasonable asking prices? Ever ponder why they have such a distorted sense of the true value of their homes? Ever try to get them to set reasonable asking numbers that are competitive with current market prices?
The short answer: NAR spin.