One Sale . . every 5 hours?!?

WSJ/Real Trends
Top 100 Agents

Today's Wall Street Journal is running a list that purports to rank the nation's top 100 Realtors.

Actually, it has four lists -- hence the (slightly confusing) title, "Top 400 Sales Professionals."

The four categories are:

1. Top 100 Agents by transaction sides (representing either a Buyer or Seller)
2. Top 100 Agents by volume
3. Top 100 Teams by transaction sides
4. Top 100 Teams by volume

Background

The distinction between volume and transaction sides is important, because otherwise the top 100 Realtors would all hail from the most expensive markets.

Likewise, it's important to distinguish between individual Realtors and teams.

Also known as "groups," they can encompass as many as a dozen Realtors, and therefore warrant their own category.

So it's especially astounding to see that the top individual agent nationwide by number of deals was someone named Joe Kadaff, who works for RE/MAX in Dearborn, MI.

According to the WSJ, Kadaff closed an astounding 1,743 transaction sides.

That works out to one sale every 5(!) hours, 24 hours a day, 365 days a year.

Phew! (or as the locals would say, "uff-dah!")

(And no, I don't know how it's humanly possible for one Realtor to close that many deals.)

Minnesota Angle

So how did Minnesota Realtors do?

And do the numbers check out?

Minnesota placed three Realtors in the Top 100 agents list: Barry Tanner (#72); Kurt Christensen (#96); and James Onomiya (#98). (Note: Tanner and Onomiya are with Edina Realty.)

They're credited with 135, 109, and 107 transaction sides, respectively.

To double-check those numbers, I searched MLS under each agent's ID, as both listing agent and selling agent, for all deals closed during 2009.

I came up with 126 transaction sides for Tanner (vs. the reported 135), and 114 for Christensen (vs. 109).

Close enough.

However, I could only find 67 transaction sides for Onomiya (vs. the reported 107).

Since the WSJ doesn't report its methodology or even the time span measured, it's hard to know what accounts for the difference.

Other Observations

Virtually all of the transaction sides for Tanner and Christensen -- and the majority for Onomiya -- were as listing agents.

That's because they represented banks selling foreclosed properties.

But what really caught my eye, in small type in the upper right corner of each list, was the disclosure "Special Advertising Section."

Bingo.

Sure enough, a handful of agents on each list had links from their names to their Web sites.

Which would explain why the list was compiled, and who it's being marketed to.

(No doubt the brokers are being solicited to promote their standings on the list, as well.)

Housing, Leverage & the Recession

Combustible Mix

The severity of this economic downturn is rooted in the household leverage crisis, which in turn is closely related to the housing market. If the housing market continues to deteriorate, then further de-leveraging of the household sector will likely keep a lid on any rebound in consumption. In other words, the future of consumptionand house prices are closely linked.

--"Housing Bubble Fueled Consumer Spending"; The Wall Street Journal (6/25/09)

Quick summary of a nice piece in today's WSJ:

--If you borrow a lot against an asset that then falls in value . . . you're in trouble.
--If lots of people do that . . . the economy's in trouble.

Read the piece, though; the authors’ methodology is quite clever (and their logic is compelling).

Reviving "Animal Spirits"

Less Trust = Simpler Financial System

"The more complex the transaction, the more trust is needed to sustain the transaction."

--Robert Shiller, "Animal Spirits Depend on Trust"; The Wall Street Journal (1/27/2009)

Robert Shiller, the Yale economist who made his name calling the 2000 Stock Market Bubble, has an excellent piece in Tuesday's Wall Street Journal explaining where the financial system is right now, and exactly how it got there.

In an era when trust has been shattered, securitization and derivatives are out, "plain vanilla" debt and credit -- and a lot less of them -- are in.

Kicking Lereah When He's Down

David Lereah's Kind-of Mea Culpa

Though he's hardly a household name, David Lereah -- formerly the chief economist for the National Association of Realtors -- achieved not a little notoriety for writing the extremely ill-timed (2005), "Are You Missing the Real Estate Boom?"

For that, Lereah is forever assured a place in financial trivia Hell along with James ("Dow 36,000") Glassman and economist Irving Fisher ("stock prices have reached what looks like a permanently high plateau") -- that, just before the 1929 Stock Market Crash.

However, Lereah no more caused the real estate bubble than Glassman caused tech stocks to skyrocket or Fisher was behind the roaring '20's stock market.

Today's Wall Street Journal profiles Lereah with a half-tweak, half "where are they now" piece, Realtors' Former Top Economist Says Don't Blame the Messenger.

Given all the truly culpable actors in the housing and credit mess, piling on Lereah seems a little gratuitous.