Tales from the Techside

The National Association of REALTORS® put out a provocative new website last week. http://www.housingmarketfacts.com/.

I will address the ‘bad’ first.

It is barely a ’site,’ and can much more accurately be described as a launch page with a few paragraphs of new content and then a number of links to existing NAR services through their flagship REALTOR.org website, in turn to REALTOR.com for searches.

Since it is done in flash as a standalone page, there are no subpage urls to link to. As a REALTOR® it might be beneficial to be able to send people to a particular piece of provocative content. In this format, you can neither conveniently excerpt information as text, nor deep link to subcontent. Iframing might be your best resort to echo this content from your own web presence.

Finally, the ‘estimate your home equity’ is particularly pedestrian. This static calculator infers that you made a 10% downpayment, and then uses aggregated market statistics averaged over time. We all know that real estate, and whatever equity you might garner from owning it, doesn’t quite work that way.

Which brings me to the good, and I think the truly provocative part of this ‘new’ resource. Namely, the assumptions that it reflects and implies. Fiscal responsibility for one, on the part of lenders, borrowers, and everyone else involved in the process. The assumptions that the equity calculator makes goes beyond just the simple issue of downpayment for purchase.

To get the 94% return on investment from your downpayment that they site claims you can realize after 3 years, you have to do a very interesting thing with your math. You have to leave out the actual mortgage payments. You have to assume that this is the cost of living, which, of course, if you are living in that home, it pretty much is. Of course, a lot of that depends on how much the cost of renting would be, etc. But lets give the benefit of the doubt here.

What is being implied here (though I highly doubt anyone at NAR would say it as such), is that NAR is really targeting the primary homeowner with its information. That when it says that a home is the best investment that you can make, they are taking into account in that calculation that you get to live in it. This obviously separates the homeowner/resident from the home investor.

Personally I am largely in agreement with this logic, although I think that the assumptions in the math should be made clear up front. The American dream of home ownership is very much alive and well, in that we keep dreaming of actually owning a home. Very few people ever get there, it seems, but under the right circumstances just the effort can be quite rewarding personally and financially. Owning a portion of a home, especially as it appreciates while you enjoy it, is just fine for me.

Hopefully, if we can keep reality separated from the dream, and encourage and maintain that fiscally responsible attitude even when market and economic conditions improve, we won’t have to relive this nightmare any time soon.

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