May 26, 2007
'80's Flashback: Housing economists catch-up with bubble bloggers
Buyer agent peers -- yes BUYER AGENTS agents not listing agents -- said The Real Estate Cafe was being alarmist two years ago when we began blogging extensively about market trends foreshadowing yesterday's headline in the Boston Globe: "Housing slump may rival late '80's."
In fact, the same day we recorded our first real estate bubble podcast, then director of the Massachusetts Office of Consumer Affairs ducked a question about whether buyers could sue designated agents (a.k.a. counterfeit buyer agents) for failing to advise them that the housing market was overvalued. Although buyers agents rolled their eyes at the time, yesterday's forecast plus one earlier this year by an MIT economist predicting another 20 percent decline in housing prices suggest the question was not off base. Here's what one of my real estate consumer advocate friends in Texas predicts:
As some home owners get "upside down" on their equity, or lose their homes by foreclosure, you may start to see a rash of litigation against the real estate "agents" who sold them their homes. Probably the vast majority of real estate agents acted as "buyer's agents" in the transactions, so there is likely the possibility some of these "buyer's agents" didn't really perform up to their expectation of "protecting" the interests of their "buyer clients."
Didn't NEEP (New England Economic Partnership) predict a soft landing for the housing market two years ago, with prices declining just 3%? Wonder if my buyer broker peers, and sellers across New England, have updated their assessment of the housing market, too? Web-savvy home buyers: Be sure to use a buyer agent (without a conflict of interest) to steer clear of bubble trouble and maximize potential savings -- both from commission rebates and falling housing prices.