In the past few days I've seen, heard and read interviews with various CEOs and industry advocates from the worlds of the home builders, realty agencies and mortgage brokers/lenders. Three years ago you would have thought these groups constituted one giant, happy family. All of them denying the existence or even the possibility of a bubble. All of them congratulating themselves on achieving historically high home "ownership" levels. All of them urging potential buyers to "buy buy buy". Buy as much as you can, as fast as you can, as often as you can was the mantra.
Enter the Great Deleveraging, a historic credit crunch, and home prices dropping faster than ever in American history: and the once happy family are stepping all over each other to point fingers and defer blame.
Most recently, I heard an interview on the radio with Margaret Kelly, CEO of Re/MAX. She was overtly laying the entire blame for the irresponsible borrowing and home buying of the past few years at the feet of the mortgage brokers and loan originators. She stated, essentially, that:
- The realtors had no culpability.
- The realtors' hands were tied because they have a "responsibility" only to get the best deal for their clients.
- Realtors were warning lenders all along that the real estate market would slow down and probably begin declining.
- Lenders need more regulations (though realtors need less).
Ok, you can stop laughing and/or grimacing now. I wonder if Leslie Appleton Young, David Lereah, and Lawrence Yun would agree with Ms Kelly, given they were continuously banging the drum of no-bubble, never-a-bubble, buy-buy-buy. In Yun's case, he inexplicably still is banging on that drum.
But it doesn't stop there. In past days I've heard the CEOs of Toll Brothers and KB Homes blaming both realtors and lenders for the current situation. And of course, the mortgage brokers association has been busy laying the blame at the feet of the banks and Wall Street in general.
I raise all this because
- This was as predictable as the bubble popping itself.
- This is entertaining as a source of Schadenfreude.
- Most importantly, it presents an opportunity for geniune, honest, ethical professionals in the real estate industry to stand up, be contrarian leaders, and drive for a serious purging of the riff raff and scoundrels from your ranks.
I do agree with all of these folks in one regard: you all need more regulation. I really dislike unecessary regulations. In your case, you've earned regulation.