I didn’t re-read the article – did it really say people were turning to real estate because of a slow economy and corporate layoffs? If so that is nonsense and a perfect example of the type of bullshit information you get from the Strib.

The boom in housing can be better attributed to record low interest rates and a tremendous loosening in mortgage underwriting guidelines, which combined to dramatically increase the amount of home an individual could qualify for. This has been the fuel for the boom – NOT legions of freshly minted realtors.

I mean, sure, part of what realtors do is stimulate demand, and many of them got in to take advantage of what they perceived as easy money, but they sure aren’t causing the boom. [quick aside: Also not mentioned in the article are the very large number of agents that are not self-sustaining, do basically no business, but maintain a license anyway. These are the people that say they are realtors so they can pretend that they actually have a job] What’s also in operation, and I’d say accounts for much of the spike in realtors, is the insane business model the “Big Two” local brokers have, which is to agressively recruit and hire as many new agents as possible, in a dogfight for market share. Realtors aren’t paid salaries, pay for their own education, and most of the newer agents give a VERY healthy chunk of their commission back to the broker, so it’s both cheap and profitable to hire new agents – much more so than to equip established agents, who keep most of their commission, to do more business, more professionally. Their motto may as well be: “A Realtor in Every Home”

Then the big brokers (I am not beating up on the smaller, independent brokers here) complain, lobby, and engage is all sorts of other shady, rent-seeking practices (legislating against discount brokers, for example) to try to protect themselves from this little competitive disaster of their own creation. It’s actually pretty entertaining to watch.

Were I an agent with Burnet or Edina, I’d be quite peeved over the fact that my own employer has basically flooded the market with competition, eroded my commissions, and diluted my already lackluster professional reputation with all these new, inexperienced agents running around. (for what it’s worth, these complaints are similarly true in the mortgage industry, though less acute) Of course, any time I bring this up with agents at said brokers, I get mostly blank stares.

Wow, we got a little off topic there, but whatever.

* shudder *

Speaking of smoking, the article contains this unpleasent little story:

“…There was the night a pimp put out a cigarette in his prostitute’s eye at Webster’s. “It was tragic,” Stenglein recalls. “The cops came, the music stopped and finally the police declared, ‘She’s a hooker,’ and everybody went, ‘Oh,’ as if that was OK, and went back to the music,” Stenglein said.”

Another good reason to keep the ordinance as is!