Ken Harney in today’s Washington Post:

Could designations of Zip codes, metropolitan areas and entire states as “declining markets” hinder a real estate recovery and hurt minority groups and moderate-income buyers disproportionately? Growing ranks of critics say yes.

Since late 2007, most lenders, insurers and mortgage investment firms have compiled lists of markets that they regard as higher risks because housing values are dropping. In those areas, borrowers are charged higher rates and loan fees and are required to make bigger down payments — costs that can rise significantly when applicants have credit scores below designated minimum levels.

In some cases, the extra fees can add more than two percentage points to the interest rate and require much more cash up front. At their extreme, declining-market designations remove entire categories of real estate from financing eligibility. Some private mortgage insurers, for instance, won’t touch second homes or rental-home investments anywhere in large swaths of Florida and California.

Industry estimates on affected Zip codes range from 8,000 to more than 12,000 across the country. Many parts of the Washington area are included.

Full story here.

This is excellent perspective, compiled by Charlottesville Association president Judy Savage and blogged by CAAR’s CEO, Dave Phillips.

This from last Friday’s WSJ, on Moody’s and the other bond rating agencies’ complicity in bringing about the current market crisis.

This from last Thursday’s WSJ on lessons learned from the current housing crisis. Here’s a snippet:

The great American experiment with homeownership for all and mortgages for everyone is over.

Millions of homeowners will lose their houses. The government is scurrying to minimize the damage to the nation’s economy and banking system. Wall Street is picking shards out of its hide. Politicians are beseeching experts for ways to prevent a recurrence. Academics are straining to find the right historical analogy and tally the losses. And the press is looking for people to blame.

In this cacophony, it’s hard to hear a couple of important questions, let alone the answers: What have we learned about providing affordable housing to low-income Americans? And can the current “oversupply” of housing be used as subsidized shelter for those who need it?

Making every American adult a homeowner was always imprudent and impractical; now that’s obvious. Four years ago, President Bush declared: “The more people who own their home, the better off America is.” And as his administration proposed federal guarantees for mortgages without requiring down payments, then-Federal Housing Commissioner John Weicher told me in 2004: “We will have some defaults, but nearly all those families will remain homeowners.”

It was true then, and clear today, that some people should rent. Some Americans don’t earn enough to pay for a mortgage and maintain a house; in recent years, mortgage brokers worried little about the first concern and never mentioned the second. Homeownership can give Americans a stake in society and help build savings — but not if they don’t have any equity in their homes. Better to help them open savings or retirement accounts.

And this from the Calculated Risk blog, from a recent Wachovia conference call on how it views consumers “walking away” from mortgage obligations. Here’s a quote from Wachovia’s chief risk officer:

The severities in the market place when we take a house back, it takes a lower price to get homes sold and our outlook is — and as I think everybody has been reading, there is an expectation that there’s a broad accumulation of foreclosed properties that haven’t hit the market yet and perhaps even some shadow foreclosures that haven’t emerged as yet. So our concern, looking forward is that — and again, what we’re beginning to see more evidence of and sense more of in the first quarter is that conditions are going to continue to get tougher and there’s an overhang of inventory out there that is going to be costly for the industry to work through.

And on that cheery note…Good day.

Several times in recent weeks I’ve read blog posts horn-tooting about how the blogger had now achieved a certain number of friends on Facebook or connections on LinkedIn, and thanking their adoring fans contacts for helping them achieve that significant milestone. “Stop the presses!” I think to myself (an unfortunately anachronistic exclamation, in this case), trying to figure out why such self-serving announcements are remotely newsworthy — particularly in light of the fact that I’m betting a goodly number of those LinkedIn folks are people you’ve never met (See my friend Cindy Butts’ rather astute take on that phenomenon here). While I subscribe to that blog for a reason (I generally get value from the blogger’s opinions and perspectives), helping him rejoice in his large number of “friends” (I use the term loosely) is not that reason. So why is he clogging my feedreader with such useless, conceited pap? Get over yourself, I want to say.

This, I think, is different from achieving a milestone in terms of number of subscribers to your blog; even magazines brag about such things. Having a large number of people read you says something about your credibility, and is worth telling (though not too often).

But friends on Facebook or connections on LinkIn? I’m sorry, but I don’t care. Unless I should care, and I’m missing the point.

Am I missing a potentially beneficial opportunity to brag about how many friends I have on LinkedIn? (148 as of this morning, including a few I don’t really know, but I didn’t want to hurt their feelings.)

So as my friend (and VAR past president) Kit Hale of Roanoke likes to say: “Help me understand…”

Info here.

I asked our membership staff to run a generational analysis of VAR members according to how long they’d been in the business. Interesting results:

In the business 5 years or fewer:

Pre-Boomer (Born 1946 or earlier) 6% / Boomer (1946-1964) 34% / Gen X (1965-1976) 43% / Gen Y (1976- ) 17%

In the business more than 5 years:

Pre-Boomer (Born 1946 or earlier) 25% / Boomer (1946-1964) 56% / Gen X (1965-1976) 17% / Gen Y (1976- ) 2%

In the business more than 10 years:

Pre-Boomer (Born 1946 or earlier) 35% / Boomer (1946-1964) 57% / Gen X (1965-1976) 8% / Gen Y (1976- ) 0%

It’s also notable that a whopping 75% of our approximately 36,000 members have been in the business 10 years or fewer, and thus had never before seen the kind of market conditions we’re now experiencing.

As VAR’s CEO, there are several conclusions I can draw from this data that can help direct how VAR communicates with and engages our members, as well as the kinds of training and support they might expect from us. More about that when I have a random minute to think out loud….

The trouble with air guitar is that no matter how well you can fake it, you’re still only faking it.

People do peculiar things at the gym. Well, at my gym, anyway.

There’s the matron who moans erotically through her half-hour of stretching each morning. The gym-rat who drips sweat on each weight bench he uses, like a Doberman marking his territory. The paunchy, world-weary types who park themselves on the very weight machine I need and commence to doze between sets. And the chatters, voluble (or perhaps hard-of-hearing) sorts who feel inclined to carry-on indelicate conversations with their buddies clear across the weight room: “Mornin’, Roy. How’s that prostate doin’?”

Which is to say, I’ve seen it all – or rather, I thought I had…until the musician.

I discovered him one morning, hovering near the leg press, eyes half-closed, mouth set in customary overbite, and swaying euphorically to the wicked sounds of his…air guitar.

I did a double-take.

“Dude,” I thought, “You’re at least 40 years old and 40 pounds overweight, and you’re standing in the middle of a crowded YMCA, playing air guitar like you’re the coolest thing this side of the lap pool. Stop it before you embarrass yourself!”

But it was too late, of course.

No doubt he was aiming for casual nonchalance, as if a grown man playing air guitar in a weight room was somehow cool, commonplace, normal. And had he been 15, I might have given him a pass. As it was though, it was unsettling, pitiful even. Here was the ridiculously self-conscious attempting to look unself-conscious and failing spectacularly.
“I don’t care if you have Guitar Hero™ at home, and you’re perfecting your technique,” I wanted to say. “I don’t care if your first cousin was Leonard Skynard. There is no band at the Y. There’s no tour bus, no albums, no agents, no groupies. There’s not even a guitar, for Pete’s sake, and the last thing people want to see this early in the morning is a bare-legged Boss Hogg jamming to the sound of…silence.”

But I didn’t say that. Because the thing is…he was OK at it. I mean, as OK as one can be, if you can get past his age and physical condition and the venue and complete, embarrassing inappropriateness of it all. I could practically hear the opening riff of Sweet Home Alabama in my head.

And that’s when it occurred to me: The real trouble with air guitar is not that it’s juvenile or better strummed in private. It’s that no matter how well you can fake it, you’re still only, well…faking it.

These days air guitarists abound, metaphorically speaking. It’s easy to find artifice parading as art in the real estate business.

When you do only three transactions a year while you dabble in a half dozen other “businesses” on the side and still think you’re contributing to the credibility of the real estate profession: Dude, you’re playing air guitar.

When, as broker, you default on your duty to supervise and mentor your agents because, “They never listen anyway.” Dude, that’s air guitar.

When you tell clients what they want to hear rather than what they need to know: That’s air guitar.

When you prostitute your professionalism with clownish advertising gimmicks: Air guitar.

When you accept an overpriced listing just to get a listing: Definitely air guitar.

Ditto failing to reply to emails or embrace new technologies, generally considering your own interests before those of your clients, and treating real estate as a pastime rather than a profession.

What I’m talking about is pretending at professionalism rather than practicing it – the difference between hanging out at the gym and working out at the gym; between miming Santana with empty hands and making real music; and yes, between having a real estate license…and having a career.

Sadly, some folks still do peculiar things in real estate, too.

VAR’s CEO Scott Brunner is rumored to be a half-decent air-trombonist. Email him at scott@varealtor.com.

Smallwander.com ^SM links the high-quality resources of small towns. The site, which is still in the testing stage, will include 10 to 30 towns from each of the southeastern states in the not-too-distant future. This site is different than other tourism sites because it

Focuses on small towns that have small-town charm, with historical, artistic, and natural offerings,
Pools the amenities of small towns into a single database,
Provides up-to-date information about events, and
Recruits businesses that are locally-owned, walkable, and environmentally-friendly

Hat tip: Phil Hardwick 

Today’s (March 19) New York Times features a credit-crisis-for-dummies story that, for simple-minded folks like me, is a must-read. Turns out, even the smart Wall Street types don’t completely understand what’s going on. (Whew! That makes me feel so much better. I may be ignorant, but I’m in good company?!)

I know it may not be PC (in most REALTOR® circles, at least), but this editorial from today’s (March 12) Wall Street Journal makes good sense to me. The gist of it is that helping homebuyers stave off foreclosure (for an additional month or so…) and programs that attempt to keep marginal borrowers in their homes at any cost is actually prolonging the agony. The author argues that the market won’t reach bottom and start back up until the bad credit risks (or at least the worst of them) are out of the homes and bad loans. In particular, he writes:

….Government policy is working against itself. The Fed is pushing on a string — it can’t bring back confidence in specific assets by flooding the market with generalized liquidity, though it can certainly undermine confidence in the dollar and its own anti-inflation credibility. On all sides, meanwhile, the call for a housing bailout is becoming deafening, nigh irresistible. But the seized-up credit markets won’t be unseized by trying to induce debtors to cling to houses they now see as throwing good money after bad.

By definition, the only haircut lenders rationally want to take is the minimum required to keep owners on the fence about walking away. Not much better are bailout plans that try to keep borrowers in their homes by shifting some of their equity losses to the taxpayer. The market has utterly changed from the market in which these recent purchasers made their purchase decisions. They’ve been renting their homes and don’t really lose much through foreclosure. Let them go.

What do you think?