AWAY WITH THE AGENTS?
When I was a young editor working for a commercial real estate affiliate of the National Association of Realtors in the 1990s, I remember hearing that NAR bigwigs were expecting their organization’s huge membership to drop considerably due to the advent of the Internet. At the time, NAR’s membership was in the neighborhood of 750,000; its members — you know them as Realtors — didn’t just show houses; they had access to a multiple listing service that let them know what houses were on the market. With the growth of the Internet, where anyone could find houses on their own without the need for an MLS or — horrors — Realtors, surely the days of the agent were numbered.
A funny thing happened on the way to realizing that future: It didn’t happen. NAR’s membership didn’t shrink; it grew dramatically, reaching more than 1.3 million in 2006. Naturally, it declined with the real estate-driven Great Recession, reaching a low of 999,824 in 2012, but then it began climbing again and in 2017 it was once again more than 1.3 million.
Part of that initial growth in the late 1990s was due to the real estate bubble. But when that bubble burst and millions of people suffered loss of their own homes or steeply declined home values, the membership of NAR was still quite a bit above what it was in the 1990s. I think the reason for that has to do with the fact that real estate agents do more than simply show you available houses. They guide you through the process, the negotiations, they hook you up with insurance, mortgages, appraisers, and more. And in the end, whether your agent brings a home to your attention or you find it online and bring it to his or her attention, that doesn’t matter because that’s not the value-add.
Don’t worry; this isn’t an ad for Realtors or NAR. I haven’t worked at NAR in two decades. But I am reminded of these numbers when I received a note from REX Real Estate, “the digital alternative to the residential real estate agent.” REX is a brokerage that touts its ability to eliminate “use of the Multiple Listing Service.” How very 2001. One advantage of REX that might capture buyer’s attention is it charges only 2 percent as a fee, well below the traditional fee charged by traditional brokers. And when you’re buying a $1.3 million fixer-upper in Glen Park, those extra few percentage points can be quite a bit.
The NAR building in Chicago is located at 430 North Michigan Avenue. That is the address of the psychiatric office of Bob Newhart in the original Bob Newhart Show in the 1970s; in the show’s opening credits, he is scene exiting the modern glass and steel building.
When I received a call from the human resources manager about my application to work there, she gave me directions to come in for an interview. She described the rather boring modern facade of the NAR building — situated across the street from the dramatic neo-Gothic Tribune Tower and right next to the terra-cotta-covered Wrigley Building — by saying “Yes, I know; we’re the National Association of Realtors and we have the ugliest building on North Michigan Avenue.”
AFFORDABILITY AND HOUSING SUPPLY
Speaking of NAR: The real estate association reports San Francisco is not alone in its housing dilemma. Housing affordability has declined in the past year across the country, and the three states ranking the lowest were Hawaii, California, and Oregon. (Indiana is first, but then you’d have to live in Indiana.)
When it got down to the metro markets with the lowest levels of affordability, it’s all California: In worst place was Los Angeles-Long Beach, followed by San Diego-Carlsbad, San Jose-Sunnyvale, Oxnard-Thousand Oaks-Ventura, and then San Francisco-Oakland.
Amy Graff, writing in SF Gate, notes: “The median sale price of a single-family home in [San Francisco] soared to $1.6 million in the first quarter, nearly a 24 percent jump from a year ago, according to the latest report from Paragon Real Estate Group. That’s a $110,000 gain in the past three months running January through March. Those who can’t get their minds around (or hands on) $1.6 million might like how real estate reporter Mike Rosenberg at the Seattle Times expressed the increase in home prices, saying they’ve gone up $1,200 per day over the last quarter. ‘That’s a mere 135 avocado toasts a day,’ Rosenberg writes.”
FINAL FUN FACT
In the basement of the NAR building in Chicago is the Billy Goat Tavern, which was made famous by a Saturday Night Live skit (“No Pepsi — Coke!” and “No fries — CHEEPS!”). I visited it only once, when a college friend was in town. The food was . . . nothing to call home about. There were indeed no fries, only chips. We left wondering how the place stayed in business until we realized why as we passed a steady stream of tourists coming into the dive to experience the SNL skit in person.