Saturday, June 13, 2009
At what point does the real estate industry's penchant for boosterism -- and the sunny outlook that comes naturally to any good salesman -- get in the way of buyers and sellers looking for guidance they can trust?
For Chris de Brey and his fiancee, Kim Martin, that inherent conflict came to a head around December.
The couple, both 25, were shopping for their first home last fall, through the height of the financial crisis. They were looking for bargains on foreclosures or short sales, and they had even made a few unsuccessful offers to buy. But as the economy froze up between October and December, de Brey, who holds a master's degree in economics, began to have doubts.
Their real estate agent, an experienced broker in Fairfax, noticed their declining interest and asked whether something was wrong. De Brey said they weren't finding many homes that sparked their interest, and he was in no hurry because he expected the supply of distressed properties to increase as economic troubles drove prices further down.
De Brey wasn't impressed with the broker's response. "He would say, 'I think the media is blowing that out of proportion and things are flattening out.' To hear that coming from him, I don't know, I just thought it was baloney," de Brey said. "I kind of knew things weren't great, and him telling us things were great was just hype. It sounded like he was just saying things that weren't true."
Because of that, and a general incompatibility with the agent, they switched brokerages in February. In late May, the couple closed on a townhouse in Centreville that was not a foreclosure or short sale. "I don't think we got a steal by any means," he said, "but I think we got a fair price. It may fall a little more, but we're going to be in the house seven to 10 years, I think, so we're going to wait it out."
De Brey said buyers and sellers should ask brokers for their opinions, but also push for the rationale behind them. "They are more experienced than me, so you do at least want to get their opinion," he said. "But whether you take it as gospel is another matter. There's a lot of information out there."
Real estate brokers used to have a lock on the data that can give clues to the market's temperature. Now anyone with a computer can look up detailed monthly statistics from the Metropolitan Regional Information Systems Web site. MRIS is the Washington area multiple listing service, which has information on the vast majority of sales.
Consumers armed with such data, along with highly publicized monthly news reports of housing-market measures such as the S&P/Case-Shiller index, the Federal Housing Finance Agency's index and the National Association of Realtors' existing-home sales reports, can draw their own conclusions about the direction of the housing market. De Brey said he followed all of those.
But even as the public has grown more skeptical of real estate industry boosterism, the National Association of Realtors, with the help of public relations giant Burson-Marsteller, has been training brokers nationwide to more effectively talk up market positives. Since February 2008, their "Surround Sound" public relations program has taught 3,500 brokers to counter negative news reports about the housing market, according to Liz Giovaniello, who directs the program for NAR.
"We really aren't in the business of turning people into cheerleaders," she said. "And for some people, buying a home isn't the right thing. We're just trying to tell the other side of the story, that every market is different, and some markets didn't have high foreclosures. . . . We didn't feel that it was always being told."
However, Candy Roberts-Joyce, chief executive of the Middle Tennessee Association of Realtors in Murfreesboro, Tenn., had this to say about the program when she addressed a group of Realtors meeting in the District last month: