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Posts Tagged ‘real estate industrial complex’

Real Estate Industrial Complex versus The Appraisal Institute’s Stealth Culture

December 18, 2016 | 8:48 pm | Favorites |


Over the past couple of weeks there has been extreme outrage expressed by the chapters and membership of the Appraisal Institute towards “National” leadership and their stealth policy culture. The last straw was “The Taking” policy of nearly all chapter funds and then charging the chapters to manage them. This major AI policy initiative was passed without vetting of the chapters or the membership. I have written about this in two recent blog posts that went viral.

Sadly, The Appraisal Institute is now working against its local chapters

Incredibly, The Appraisal Institute is taking chapter “excess cash” and charging them for the privilege

Emails, letters and documents are flying everywhere.

On Thursday it was suggested I set up a central repository for all this information since not everyone in the chapters and membership are seeing all the same information.

So we set one up and it is ready to go. This new web site is a forum that allows users to either lurk or register. If you register you can add content and comments. If you’d rather lurk, that’s ok too since the goal here is to create transparency. I preloaded REIC with some of the information I have. I’m happy to upload information for those of you that are less tech savvy…just use my email address below.


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[NYT] Developers Need Blind Optimism

May 26, 2010 | 10:28 am | |

[click to expand]

I don’t think I am cut out to be a developer.

While I get the hard work and analysis part, I’m missing the blind optimism part.

And no, I’m not blindly pessimistic either – during the boom years blog commenters periodically accused me of being a shill for the real estate industrial complex (I liked the phrase so much I bought the domain).

Blind optimism is what makes developers successful because everyone tells them they can’t do it. But it is also their downfall because builders build until they can’t build anymore.

Today’s New York Times article by Charles Bagli “Building a Tower of Luxury Apartments in Midtown as Brokers Cross Their Fingers” which announces Barnett’s 1,005 foot condo with a hotel at the base. The site is due south of the Essex House between West 57th Street, a retail corridor and West 58th Street, a service road for Central Park South (West 59th). I’ve got a “let’s consider reality” quote and graphic in the piece.

The project is the first major construction start in New York since the fall of Lehman Brothers in September 2008, and it is an ambitious, even risky undertaking. Unemployment still hovers at 10 percent in the city, which has only just begun to gain back some of the 150,000 jobs lost during the recession. Not so long ago, the real estate industry was right behind Wall Street and the nation’s automakers in crying for a federal bailout.

Access to financing determines when and how something gets built – in this case it was Abu Dhabi since US banks are not interested new luxury condo development given the excess inventory that needs to be absorbed first.

Barnett said “We think it’ll be the nicest project ever built in New York.” Given the proximity and the success of nearby 15 Central Park West – my vote for the best Manhattan condo ever built, I’m guessing that’s the comparison being made. Although recent sales there have topped $6,000 per square foot, the building fronts Central Park and straddles Midtown and the Upper West Side, I’m not so sure its a reasonable comparison to make but I do wish them well.

Remember I’m not cut out to be a developer.

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[The Housing Helix Podcast] Ben Jones, Founder, The Housing Bubble Blog

January 6, 2010 | 1:11 pm | | Podcasts |

In this podcast I get to speak with Ben Jones, founder of The Housing Bubble Blog. With a background in business, economics, and accounting, he’s been a prolific blogger/analyst of the housing bubble and crash since late 2004 and is considered the go to reference source for bubble conversation. His site continues to draw a rabid readership who come there to lurk, exchange ideas, vent, call out spin and identify those in the real estate industrial complex.

In 2009, Mr. Jones was recognized by Inman News as one of the 50 most-influential people online in real estate. He also owns a property preservation, management, and investment company in Northern Arizona.

Check out the podcast

The Housing Helix Podcast Interview List

You can subscribe on iTunes or simply listen to the podcast on my other blog The Housing Helix.

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[Interview] Ben Jones, Founder, The Housing Bubble Blog

January 6, 2010 | 11:30 am | | Podcasts |

Read More

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If Greed Is Good…Bubbles Are Good

May 7, 2007 | 3:10 pm | |

As the character Gordon Gekko (not to be confused with the Geico version) said in the one of my favorite movie speeches in the 1987 film Wall Street, “Greed is Good” (I have been in the apartment Charlie Sheen “dumped.”)

The point is, ladies and gentlemen, that: Greed, for lack of a better word, is good. Greed is right; greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms, greed for life, for money, for love, knowledge — has marked the upward surge of mankind and greed, you mark my words — will save not only Teldar Paper but that other malfunctioning corporation called the USA.

It seems that bubbles are good too. Daniel Gross, one of my favorite econ columnists in Slate and the New York Times wrote a book with an intriguing title and comic book cover design Pop! Why Bubbles Are Great For The Economy.

The book is available tomorrow. Click the widget above.

The concept is that the frenzy of irrational economic enthusiasm lays the groundwork for sober-minded opportunities, growth, and innovation. Of course that means ignoring the pain and suffering of individuals, but it peeks piques my curiousity enough to buy the book. Much of the bubble discussion out of the housing sector to date has been an us vs them, real estate industrial complex v. renters, etc. conspiracy theory.

Barry Ritholtz of Big Picture highlighted a Brett Arends post that bubbles are everywhere as per value investor Jeremy Grantham who writes that the entire world is a bubble.

Here’s more on the topic (via Unstructured). No real visuals but its interesting nevertheless.

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Real Estate Industrial

February 5, 2007 | 12:41 pm | |

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 weekly column on Curbed 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).

However, I think the blogosphere has served as a powerful offset to the spin coming out of NAR. 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 – 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.

Go to

Here’s the first entry: Military origins (which explains the acronym)

REIC Definition

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No Gray Rooms In The Real Estate Industrial Complex

January 18, 2007 | 1:57 pm | |

One of my favorite sayings over the last few years has been the use of the phrase:

The Real Estate Industrial Complex [REIC]

The term is being used by bloggers and Big Media as a daily descriptor of the real estate industry, specifically referring to those employed by it. The chairman of the board of the REIC seems to be the National Association of Realtors.

Negative references to the REIC in real estate bogs are specifically targeted toward residential real estate and its brokers and agents. However, anyone who works in the any real estate related field such as appraisers (me), consultants, engineers, contractors, developers, mortgage brokers, etc. are presented as card-carrying members. In other words, it’s a one size fits all label used under the mask of anonymity. Everyone, by definition, is bad. I guess that’s the beauty of blogging.

The derogatory use of the term seemed to evolve around 2004, when blogging really began to go mainstream and the bubble blog genre emerged. I found references to REIC on, one of the leading bubble blogs, in 2004 referencing earlier discussions. So it may be even earlier than that. Patrick seems to credit Ben Jones The Housing Bubble Blog, who is the king of all bubble bloggers. He cranks out an endless supply of posts, which are mainly text copied from online articles with very little interpretation, other than things are bad. He never seems to attack anyone personally, which gives him more credibility than most, but his commenters nearly always do. His traffic volume is amazing – its enough to support him and his family through advertising (so I have read). Although the content is always biased in the opposite direction of the REIC, it provides a valuable perspective that real estate has been sorely lacking after being spoon fed press releases from NAR since time began.

The evolution of this new derogatory angle for the entire real estate community coincided with the real estate market spike in 2004 and 2005 and morphed into heated discussions of a housing bubble.

My own experience with the REIC label has occured during the past year and a half since I began posting my Three Cents Worth weekly column on Curbed, the best real estate and neighborhood web log out there, IMHO. The commentary placed in my column always includes a few people who have the need to hard sell me as a:

  • card carrying member of the REIC
  • cog in the machine
  • shill for the real estate industry
  • paid creator of charts and stats to induce people to buy

The underlying theme is that card-carrying members of the REIC get paid to spin the market info to its favor as part of a vast and complex conspiracy (ever been to a real estate convention?) Last week one of the typical commenters finally inspired me to purchase the domain:

Frankly I was surprised the domain was still available, but as a card-carrying member, I guess I am entitled. A sample email address might be something like cog (at)

Apparently these types of commenters, whom I would guess are mainly disgruntled renters frustrated with the diminishing affordability of housing, need someone to blame, hence the REIC monniker. On one hand its kind of funny because these type of comments are usually way out there – LOL funny – and I can only imagine what they are like in public (kind of a road rage parallel here). On the other hand, it is just as bad as the public relations spin being dished out by NAR, but in the opposite direction. Apparently there’s no time for research – that would take effort – its easier to point and hide. Again, I guess that’s the beauty of blogging.

To recap: You either work for or against the Real Estate Industrial Complex. There is no room for gray because its guilt by association. Plus, the name and the acronym are very, very cool.

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Affordable Commentary: The Real Estate Economy Keeps Churning And It Doesn’t Care About Your Opinion

July 31, 2006 | 9:50 am | | Public |

There has been a lot of discussion, criticism and debate about what is going on in the housing market. In fact, the flow of information on the topic has been phenomenal. However, what this debate has garnered, is the need to take sides. Right and wrong. Truth or fiction. Moral or immoral. Be part of the Real Estate Industrial Complex or not.

I have been thinking about this for a while, and its confirmed each week after I post my weekly column Three Cents Worth in Curbed. There are a few commenters who sound pretty smart but seemed obsessed with the idea of taking sides. You are either for or against their position and its personal. However, whatever position you take really has no bearing on anything.

The recent ruling by Chicago City Council to pass a law on the minimal acceptable wages [SunTimes] to be paid by big box stores is a prime example. I lived in the Windy City for a few years when I got out of college and I know how Chicago politicking can get pretty intense. However, the politicians in this issue missed the point. Its not about the morality of Wal-Mart and Target paying a living wage to their employees (which they should), its about economic reality. Raise wages to an unacceptable level, and the companies go elsewhere. Period. Economic forces are not about right and wrong. Businesses go where the money is. Create the right economic environment and they will stay.

Then I happen to read The Stalwart’s excellent post The Market Doesn’t Care About Your Opinion which rings so true with the real estate market.

In a real estate example, take bubble blogs at one end of the spectrum and the National Association of Realtors at the other end.

Bubble blogs can generate a large amount of traffic and the volume of commentary and amount of camaraderie is incredible. Some bloggers will simply post “Have at it” and 200 comments will be posted about every conceivable position about housing bubbles. Everyone seems to have an opinion on the topic of housing bubbles and it can be deeply personal. As an aside, it would be interesting to know if the majority of bubble blogs are run by renters? They seem to be.

The NAR has done a poor public relations job this go ’round with its spin. But as far as spin goes, what do you expect? They are an industry trade group – that’s their function – all trade groups spin. Their spin during the transition from the housing boom was not lower in quality. The process is so much more transparent than ever before that they can not be as misleading as in the past and get away with it. I wonder if they every take their own advice?

However, at the end of the day, to debate whether housing prices are too high or not won’t change anything. That’s right up there with watching the local news and hearing about all the local fires and tragedies that day and then talking to your friends about it.

If housing is less affordable today than 5 years ago, then the argument should not be whether or not this is in fact is fair or moral, etc. Buyers and sellers are not being forced to buy or sell (in most cases) in a higher priced environment.

Real estate markets keep moving up, down or sideways and with that so does affordability. It does not matter what side you are on because the real estate economy does not care.

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Broker-Bashing Is Now Passé: Out With The Old, In With The Experts (Until The Next Boom)

July 17, 2006 | 10:42 am |

I was reading a commentary in the Boston Globe this weekend called Brokers helping to drive up Northeast housing prices and that was the last straw for me. The whole idea of Big Brother and the Real Estate Industrial Complex (great name for a band) is simply ridiculous. The idea that real estate brokers are to blame for high housing prices is the classic “I am a victim” whine and frankly I am getting tired of it for its sheer simplicity and lack of scope.

Are there bad real estate brokers? Yes.

Are there good real estate brokers? Yes.

Do we see this inconsistency every profession? Yes.

Is the profession undergoing a change? Yes.

Are we prone to stereotype? Yes.

I for one, am always critical of the stats generated by NAR because they are often misleading. Thats not what I am talking about here, rather, the troops in the trenches – are actually real people.

When a seller lists a property for sale, is it the real estate broker’s job to get the highest possible price they can for it? Yes.

Lets recognize them for what they are: sellers of real estate. They are not statisticians but they have to deal with numbers every day. They are not pyschologists, but they hand-hold wacky clients every day. They need to put the positive spin on their efforts because thats what selling is. Do some real estate brokers go too far? Yes.

I speak from first-hand experience since real estate appraisers were made to blame for the S&L Crisis in the late 1980s.

Were there horrible appraisers back then? Yes.

Are there horrible appraisers now? Yes (the appraisal profession is worse off now).

That being said, the latest housing boom has begun to change the profession, bringing in better educated professionals as brokers [SFGate].

As the order-takers fade, better marketers and more economic-savy individuals will begin to gain market share within the real estate brokerage profession. But this is volatile. The profession’s very low barrier to entry will likely cause these new improvements to weaken again when the next housing boom arrives. Then I suspect the bashing will begin anew.

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