As I watch the price of gas at the pump continue to climb - yesterday I paid $4.19 per gallon for premium here in Loudoun County, Virginia - I secretly pray that it continues to go up. I know this might sound crazy but if you think about the implications of extremely expensive gas on the real estate industry, it is actually not a bad thing at all. In fact, many of the problems the industry either can’t or won’t correct would be solved by a gas crisis here in the United States.

Thin The Herd - $10/gallon gas would force a lot of the agents that are just getting by or part time agents that have a license but sell very little real estate to not renew their license. We have already seen the effects of real estate price corrections on the ranks of licensed agents and continued economic pressure would continue to “thin the herd”. And with dues a major source of revenue the associations would never reduce their ranks even if it means a better membership and an improved industry image.

Improve the Membership - Ineffective and lazy agents would leave the industry if gas was $10/gallon. The ineffective agents would have to because it would no longer make financial sense to drive clients around to houses for 8 hours a day without the hope of a sale. The lack of ability to properly prequalify, preview and close deals would cost them too much money and they would be forced out of the business. The lazy agents would refuse to drive the car and preview homes for their buyers in an effort to save money. This would eventually backfire as their lack of local industry knowledge would be realized by savvy buyers and they would be fired/abondoned by their clients.

Reward Technology Savvy Agents - $10/gallon gas would make technology savvy agents more effective, more productive and more relevant. As sellers realize the importance of high quality pictures and dissemination of their listing throughout the online world of real estate, they will turn to agents who are already doing this for their clients. As buyers stay home and preview and house hunt in an effort to save precious gasoline, they will overlook listings with poor online exposure. They will demand more information about a home online and eliminate homes from their search that have little or no information. We are already seeing this happen at $4/gallon but $10/gallon would really deepen the chasm between technology agents and non-tech agents.

Agents Forced to Think Local - Another positive result of $10/gallon gas would be a return to agents focusing on their local area instead of going wherever they can get a listing or wherever a buyer wants to buy. Agents taking listings two and three counties away will become a thing of the past when the agents realize all their profits will go right out the exhaust pipe of their cars. Agents will instead form referral networks in neighboring counties and jurisdictions outside of their area of expertise. This will also eliminate problems caused by listing agents unfamiliar with areas mispricing homes and creating badwill.

If there was a truly revolutionary broker in the real estate business, they would be anticipating the continued rise in gas prices and would create a brokerage that required their agents to use technology to its fullest extent, use only recycled products such as signs and paper and require all their agents to drive hybrid or electric cars. But are there any truly revolutionary brokers?

Many things have made me proud be to a member and now staff with the Fredericksburg Association of REALTORS®.  One of the main aspects, is our leadership’s willingness to embrace new technology and make it relevant to our membership.  We are always trying to find good venues to communicate our services to the membership.

Having seen the success and in consultation with VAR, we’re proud to introduce www.FAARForums.com real estate blog.

We’re hopeful that this blog resource will help to enhance our interaction with our members and to provide solid relevant information.  We’ve got a wide variety of contributors from Affiliates, Attorneys and active members of the Association.  Regardless of what local association you’re with, we’d be happy to have you visit and share your views with us!

This post is part of a series covering my journey of discovery through the history of the National Association of REALTORS. As my guide and my inspiration, I am using a book published by NAR, “100 Years in Celebration of The American Dream,” celebrating the Centennial of NAR. The following was inspired by reading just the first ten pages.

The National Association of REALTORS turns 100 years old this year. That is pretty old, as organizations go. It is old enough that there is not one single member of our organization alive today that can remember the birth of NAR. This is both good and bad.

The Good

100 years is a long time. Here is some simple math:

1908 to 2008 = 100 years

1776 to 2008 = 232 years

NAR has been around for ALMOST HALF OF AMERICAN HISTORY!

The people who make up the membership of NAR have lived and worked through many of the significant events in American history.

The fact that our organization is 100 years old is a testament to the vision and hard work of the men who met together in Chicago 100 years ago with the idea of starting a national organization of “real estate men,” as they were then called. As a general rule, bad ideas don’t usually stick around for 100 years (I can think of a few exceptions, but most of them required a war or two for survival). Those men, and all those who have come and gone since, obviously did something right.

The Bad

100 years is a long time. Our culture has changed quite a lot over that time. Attention spans are much shorter, and so are memories. This means that much of what has been learned might have already have been forgotten. This fact is what makes the NAR Centennial book such an important publication. We should always be reminded of those who came before, we should always be willing to learn from their example and from their work. If we fail to do that, then the end result is that all of their hard work will have been in vain. I hope very sincerely that those of us who have chosen to bear the title of REALTOR today, will do our best to honor those without whom our privileges would not be possible.

Let’s Begin at the Beginning

I dare think that the practice of real estate at the turn of the 20th century would be almost completely foreign to REALTORS practicing today. When I say this, I’m not talking about the many technologies that make our daily work life more efficient. I’m talking about the actual cultural, professional, historical, and legal climate that was present 100 years ago for real estate men.

Some things to consider about the world of real estate 100 years ago:

1) Widespread private real estate ownership is brand new. I think it is pretty safe to say that the majority of you reading this post own the home in which you currently live. There is also a pretty good chance that you live in a suburb, or even a rural area (like me). 100 years ago, that was not the case. Most Americans did not own their homes, and the cities held the vast majority of the American population. The concept of the suburb hadn’t even been born yet. It was about this time, however, that many cities and towns were rapidly expanding. This meant that those expanding cities and towns needed a place for people to live, they needed real estate.

2) There were no licensees. 100 years ago, anyone, I mean ANYONE could call themselves a real estate dealer. There were people called “curbstoners.” These unscrupulous individuals would basically set up shop as a real estate dealer on the sidewalk (the curbstone), and bilk or swindle anyone they could. Have you ever been in a city and been approached by people handing out flyers for something, or saying, “psst– come check out these watches and handbags I have. . .” now imagine if those people were peddling real estate. Scary, but it was happening all over.

3) There were no rules or laws governing transactions. We live in a world with RESPA. 100 years ago, however, Real estate transactions were governed by simple contracts common law. All that was needed was an agreement between the buyer and the seller. No mountains of paperwork, no lengthy disclosures, no warrantees, and very little recourse if they whole thing went awry.

These Conditions Warranted A Solution

The ethical practitioners of real estate recognized there were problems. What they didn’t have was a viable way of solving them. They did recognize, however, that the problems were similar all over the country. As the number of real estate practitioners grew, so to did the need for cooperation and collaboration among them if they were to address the issues facing their profession.

It took the leadership and vision of some of the nation’s largest real estate boards at that time to address these issues and launch the organization that would eventually be known as the National Association of REALTORS. We all know, however, what can happen to the best laid plans of mice and men if there is no leadership to guide them.

The necessary leadership would come first from the man who would eventually be the 5th President of NAR. More on him, and the seed that he planted, in my next installment. . .

Excellent article in this past month’s THE ATLANTIC magazine on the long-term implications of America’s shifting demographics. I’d say it’s a must-read for REALTORS®, who are already seeing first-hand the profound changes shaping the make-up of our communities. Here’s a clip (the link to the entire piece is at the end of this post):

Start with the stuff America makes, and the people who make it. Young people buy goods, like cars, houses, and iPods. Old people need services, like transportation, meal preparation, and health care. We have made great strides in enabling the elderly to get around—the scooters you see advertised on daytime television, for example. My grandmother, who is blind and physically frail, was able to live at home much longer than she otherwise could have because she had Meals on Wheels, a home health aide, and a Life Alert-type necklace to call for help in case she fell.

But these services require a lot of labor. According to an analysis by McKinsey Global Institute, the number of hours required to produce an automobile in North America fell by 1.7 percent annually from 1987 to 2002, to an average of about 100 hours. Meanwhile, it still takes about the same amount of time as it always did to drive a senior to a doctor’s appointment, or to help an older patient bathe and dress. Productivity growth is faster in the things that kids consume than in the things that the elderly need.

As the Boomers age, they will consume fewer of the things that we produce efficiently, and more of the things that we provide relatively inefficiently. Productivity is notoriously difficult to pro­ject, but many forces will be pushing it downward as the Baby Boomers age.

Since services are labor-intensive, and the number of service-consuming seniors will grow rapidly, we’ll need a lot more workers (that’s bad news for those who favor restrictive immigration policies, particularly the kind that keep low-skilled workers out). And, of course, the mix of service workers that we’ll need will be different from what it is today. In effect, the next 20 years will require a massive transfer of resources and people away from the care of children, who will decline in relative number, and toward the care of old people.

This rebalancing should have already started, but it hasn’t. Consider that approximately 29,000 pediatricians now work in the United States, caring for roughly 75 million children. To care for roughly half that number of patients over 65, the American Geriatrics Society reports, the country has only 7,128 board-certified geriatricians. Just 468 first-year fellowships in geriatric medicine were available in the 2006­–2007 academic year; nonetheless, almost half of them went unfilled.

The story goes on to discuss the implications of demographic change on everything from Social Security and the stock market to the current debate over immigration policy (and how we’ll need MORE low-wage workers to care for our aging population, not fewer).

Full story

First time I’ve heard a reporter actually acknowledge — without being prompted — that the recent downturn in homes sales was preceded by a historic run-up, and that even now, in most places that have experienced a downturn, pricing remains above what it was prior to the 2002-2006 run-up. Yeah, our association leaders have been reminding the media all along, but it’s nice to hear a reporter who “gets it.” (I also think it’s interesting that Schiller’s index only includes 10 cities….)