I love this phrase!
Four words that pretty much paint the picture of the war between those selling real estate and those who are renting (and either can’t afford to purchase or are uncomfortable with doing so at this time).
While I had heard the phrase many times before, it was inspired by my [Three Cents Worth](http://matrix.millersamuel.com/?cat=37) weekly column on [Curbed](http://www.curbed.com) where there are always a few conspiracy theorists that comment on my posts. They accuse me of being in the REIC because I am in a real estate related business, although not as an agent, but as an appraiser.
When someone is accused, labeled, etc. of such an affiliation (guilty as charged), its not about being open to solutions or ideas, its about taking sides. Although some of the blame clearly should be placed on the real estate industry, its not a 100% type of issue, even though it is presented as such.
REIC is a cynical phrase that is used as a weapon on real estate spin, but actually serves as reverse-spin as well. As I mentioned in an early post…[there are no gray rooms in the Real Estate Industrial Complex (REIC)](http://matrix.millersamuel.com/?p=1038).
However, I think the blogosphere has served as a powerful offset to the spin coming out of [NAR](http://www.realtor.com). Although its funny, I think the conflict is more about an awakening that NAR is a trade group, and not a neutral reporter of market conditions.
As a result, I set up a separate simple site yesterday (to play with [Apple’s iWeb tool](http://www.apple.com/ilife/iweb/) – still a little rough), to cover the REIC and will be adding content over time and linking it to Matrix.
Enjoy and [please send along ideas for the phrase’s use](http://matrix.millersamuel.com/?page_id=72).
Go to [RealEstateIndustrialComplex.com](http://www.realestateindustrialcomplex.com/RealEstateIndustrialComplex/REIC-Home.html)
Here’s the first entry: [Military origins (which explains the acronym)](http://www.realestateindustrialcomplex.com/RealEstateIndustrialComplex/REIC-Commentary/83685C00-95DD-4A9F-81D6-CDFF02B93A01.html)
Tags: Realtor.com, real estate industrial complex, REIC, NAR, National Association of Realtors
I have said before I think the conspiracy idea is nuts, but anything that makes the public realize that the NAR will say anything to sell houses is fine with me.
Although I think you’re wrong that it’s all renters using that term – I’ve heard homeowners use it too. Many people just don’t like the industry in general and have latched onto the idea.
Thanks – I agree with you – I’ll update my commentary to reflect that.
As a broker, I am sensitive to the fact many people imagine we take home a large – and in some people’s minds unjustified – cut of each transaction. But what strikes me is that if you are a broker on one one side of a deal, you split your 3 percent with the house — and both you and the house are taxed on your respective 1.5 % shares. Same for the other side. (This assumes a 6% commission, which is not always the case.) So consider the fact that the government imposes transaction taxes: the transfer tax, the mortgage recording tax, the mansion tax, capital gains tax, etc. But they are also getting a significant chunk of the commission — maybe 2%? The government may actually pocket more commission than any individual salesperson or broker. Interesting to think about.
Jonathan, It’ll be interesting to see what happens when all sides awaken to the fact that the NAR is a trade group. The NAR sends out more than its share of spin, and I think that the intended audience is, in large part, Realtors.
I’m sure that sounds obvious. But other industry trade groups, such as the Mortgage Bankers Association, National Association of Mortgage Brokers and National Association of Home Builders, don’t seem to spend as much energy spinning their own members. When MBA economists expect loan volume to drop and for delinquencies to rise, they say it. Their chief economist applies his spin to the media, but he doesn’t do it in a misleading way.
Mortgage bankers, mortgage brokers and home builders would go into revolt if they thought their trade groups’ economists were blowing sunshine up their asses. But Realtors don’t seem to mind. I invite speculation as to why.