Re: Realtors Are Paid Too Much and Are to Blame in PArt
Date: April 18, 2008 08:57PM
Joe H Wrote:
> That comment applies to you too, leeches.
> Actually, it applies to most people in here. I
> suppose you think gas companies are gouging and we
> have a right to cheaper, 1 dollar gas. Its called
> a price ceiling, and you can find many examples by
> doing a simple google search to see why this is
All industries are subject to varying levels of legal and regulatory shaping to achieve national economic and social objectives - from not selling rotting meat and banning slavery to copper unbundling in the communications industry
The US model is to try minimal regulation first until a market failure or public harm such as price gouging occurs. (the problem with this strategy is that by the time you need to regulate the lobbyists are already getting fat)
I think its pretty clear that both are true in the real-estate industry
Does anyone seriously think that it costs $30k to sell a $500k house? or $60k to sell a $1M house? That's a not bad salary for a person for a whole year - there's just not a years worth of work involved. Having done it, I can attest to that - probably 2 weeks total for everyones REAL productive time (buyer and seller not included).
Petrol rises and falls with crude supply and demand (at least to some degree given risk premiums, strategic gaming, appropriate investment in refining capacity, not blowing up your plants by accident, currency fluctuations etc)
Realtor prices have stayed fixed at one percentage level through peaks and troughs, high market liquidity and low market liquidity.
The difference is that the structural rigidity in the market has kept % prices static, absolute prices doubling every few years and drawn huge numbers of additional players in.
Both public and individual realtors have had little opportunity for pricing pressure e.g. prices have escalating for the public and individual realtors claim not to be getting richer despite the industry massively increasing its revenue
That seems to be a market failure
That may not matter, except that the 6%'s get built up and built up through sucessive sales until they become a major element in the price of houses - which has the effect of sharpening and lengthening slumps and stalling national economic activity - and that's where we find ourselves.
If you assume prices will either fall or be pretty near static for some years to come - who has 30-60k to spend on the transaction unless they absolutely have to. They may spend 5k or 10k but 30-60 gets a lot of work done on your house,
So its not fair on consumers and its bad for the economy
Time to change