Ozymandias 2013 AEI 1.1

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Presentation to the NAR Association Executives Institute meeting of 2013.

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  • Thank you to NAR, to Marc Lebowitz, to Laurie Oken, and to all of you.
  • Jed gave us hope! He’s an actual economist, and knows way more than I do. So what am I doing here talking about the Association of the Future? I’m here to offer a look beyond and behind the numbers. Because sometimes, the numbers don’t tell the whole story.
  • Trend #1 is that America is becoming “renter nation”.
  • We are now officially at $16T in debt. $1.6T in deficit spending annually. The major flaw with the assumption that the Feds will keep real estate propped up is that they might run out of money before they run out of desire.
  • Mandatory spending includes entitlements like $773B for Social Security, $733B for Medicare & Medicaid, and VA benefits, etc. which are REQUIRED by law to be paid.
  • “ In other words, they could cut the entirety of the Federal Government’s discretionary budget– no more military, SEC, FBI, EPA, TSA, DHS, IRS, etc.– and they would still be in the hole by a quarter of a trillion dollars.” - Simon Black, Sovereignman.com
  • “ In other words, they could cut the entirety of the Federal Government’s discretionary budget– no more military, SEC, FBI, EPA, TSA, DHS, IRS, etc.– and they would still be in the hole by a quarter of a trillion dollars.” - Simon Black, Sovereignman.com
  • “ In other words, they could cut the entirety of the Federal Government’s discretionary budget– no more military, SEC, FBI, EPA, TSA, DHS, IRS, etc.– and they would still be in the hole by a quarter of a trillion dollars.” - Simon Black, Sovereignman.com
  • FHA, GSE, HUD, everything
  • the Elites have turned against housing
  • Trend #1 is that America is becoming “renter nation”.
  • It isn’t clear what this means, but it means whatever came before is “unsustainable”.
  • USDA first casualty???
  • 13,500 showed up in person; 13,500 joined “virtually”.
  • wisconsin labor unions gave it their all; spent $35m; Scott Walker still won
  • Richard Smith, Realogy; Frank Keating, American Bankers Association;
  • in that context, the commission recommends consideration of further modifications to federal tax incentives for homeownership to allow for an increase in the level of support provided to affordable rental housing
  • Some of our states and municipalities are in bad shape. Cities are especially dependent on property taxes.
  • Ergo... homeownership will no longer be a national priority
  • Ergo... homeownership will no longer be a national priority
  • BofA: Priya Misra, 2012.
  • Ergo... homeownership will no longer be a national priority
  • Ergo... homeownership will no longer be a national priority
  • Ergo... homeownership will no longer be a national priority
  • Been hearing this for ten years.
  • unemployment and UNDERemployment rampant. YOUTH unemployment is the highest since WW2.
  • 50% of college graduates are unemployed or underemployed, working jobs that don’t require a degree.
  • 40% of all 18 to 29 yr olds have trouble paying their bills. Graduating during a recession, unfortunately, can affect an individual economically for up to 15 years—and not in a positive way.
  • For college graduates, student debt is absolutely CRUSHING them. Cost of college education has increased faster than inflation for over a decade.
  • For college graduates, student debt is absolutely CRUSHING them. Cost of college education has increased faster than inflation for over a decade.
  • For college graduates, student debt is absolutely CRUSHING them. Cost of college education has increased faster than inflation for over a decade.
  • Roshell Schenck has a Ph.D. in pharmacy and earns $125,000 a year. Yet, because she has more than $110,000 in student loan debt, counselors have told her she can’t qualify for a mortgage. “I’d love to buy and can afford to buy,” says the 28-year-old graduate of Lake Erie College of Osteopathic Medicine in Erie, Pa. With lenders scrutinizing college loans more closely than in previous years, it’s almost impossible for borrowers such as Schenck to get approved for mortgages. “My debt is crushing my chances of purchasing a home.”
  • And one of 3 young adults living at home with mama. Highest level since 1950.
  • Gen-Y might want to buy, but they don’t see just how they’ll manage that. http://www.npr.org/2012/06/07/154095235/to-own-or-rent
  • Gen-Y might want to buy, but they don’t see just how they’ll manage that. http://www.npr.org/2012/06/07/154095235/to-own-or-rent
  • But Gen-Y isn’t all unemployed. Some of them are doing well, and buying. What are they like?
  • highly educated, very very smart, tech-savvy, accomplished They have to be to get good jobs in this economy.
  • Three speakers: one is the financial comptroller of a major waste management firm. Another does international investment work. Woman is a doctor.
  • One of the most popular articles on The Atlantic, by Kate Bolick.
  • Charles Murray: Upper Middle Class marriage rates down 10% from 1960 to 2010. Working class marriage down 35%, from 83% in 2960 to 48% in 2010. Majority of working class NOT married.
  • From 2010
  • "In one Manhattan ZIP code, for example, women account for 63 percent of 22-year-olds."
  • "In one Manhattan ZIP code, for example, women account for 63 percent of 22-year-olds."
  • Charles Murray: Upper Middle Class marriage rates down 10% from 1960 to 2010. Working class marriage down 35%, from 83% in 2960 to 48% in 2010. Majority of working class NOT married.
  • Trend #3: the technology war is over.
  • New U.S. single-family home sales unexpectedly fell in February to hit a record low and prices were the lowest since December 2003, a government report showed on Wednesday, suggesting the housing market slide was deepening.
  • Consumers say this. So do your members.
  • Consumers say this. So do your members.
  • Consumers say this. So do your members.
  • what percentage of your members...
  • what percentage of your members...
  • 13,500 showed up 13,500 joined “virtually” 2.7% turnout rate
  • Narwhal platform --> possibly the reason why Obama beat Romney
  • CROWDVERB, CivicScience
  • Nov. 2011 numbers
  • your members, by their very nature, have trust relationships with clients and ex-clients
  • what percentage of your members...
  • what percentage of your members...
  • Ozymandias 2013 AEI 1.1

    1. 1. ozymandias, 2013
    2. 2. 1. renter nation
    3. 3. Renters: +3.6MOwners: -2.8M 2010 Census
    4. 4. Why Renter Nation is the New Normal
    5. 5. Basic Math, FY 2012 Tax Revenues $2.469 trillion minus Interest on Debt $360 billionMandatory Spending $2.525 trillion Total $2.885 trillion equals Shortfall -$416 billion
    6. 6. Discretionary Spending
    7. 7. Discretionary Spending
    8. 8. Federal spending on real estate? Discretionary Spending
    9. 9. Our Elites Have Lost Faith
    10. 10. “Sustainable Homeownership”
    11. 11. MIDQRMFHAWTF
    12. 12. MID vs. MedicareQRM vs. Social Security FHA vs. Section 8 NAR vs. Public Unions
    13. 13. 2.8% turnout rate
    14. 14. Fight with Money? Source: OpenSecrets.org
    15. 15. “the commission recommends consideration offurther modifications to federal tax incentivesfor homeownership to allow for an increase inthe level of support provided to affordable rentalhousing”
    16. 16. let’s not forget our states and cities...
    17. 17. Property Taxes vs. Police Protection
    18. 18. Yes, but... The Fed!
    19. 19. The Fed will ownmarketthan2014... of theentire mortgage more by a thirdand... two-thirds of the entire bondmarket with maturity over 5 years
    20. 20. this ride will come to an end
    21. 21. Renter Nation is the New Normal
    22. 22. Ah, but Millennials Are Coming!
    23. 23. 2. generation screwed
    24. 24. Sure am glad I studiedBusiness and Italian in college!
    25. 25. 40%source: prosumer-report.com - http://www.prosumer-report.com/blog/2012/03/12/moneyless-millennials-and-their-new-lives-of-financial-dependence/
    26. 26. NY FED ON STUDENT LOANS
    27. 27. “My debt is crushing my chancesof purchasing a home.”
    28. 28. one of threesource: prosumer-report.com - http://www.prosumer-report.com/blog/2012/03/12/moneyless-millennials-and-their-new-lives-of-financial-dependence/
    29. 29. pent-up demand?
    30. 30. I can afford rent, but the dream of owning a home has becomejust as ludicrous as the one where I win the Olympic Gold Medalfor figure skating. At 29, I no longer see home ownership as anoption. I no longer see anything but renting in my future, and theonly possibility is that one day I will be able to rent a home andpretend a little better than I do in this one bedroom apartment. — Jennie Fernandez, 29 Albuquerque, N.M
    31. 31. 10 years ago, Steve Jobs, Johnny Cash, and Bob Hope were still alive.
    32. 32. X X XToday, we have no Jobs, no Cash, and no Hope
    33. 33. What about the ones who are buying? What are they like?
    34. 34. The Elite Professional Class
    35. 35. So what do these elite young professionalsthink of real estate agents?
    36. 36. HearItDirectQuickTime™ and a California Southern decompressor are needed to see this picture. AUDIO #2
    37. 37. Ah, but... Family Formation!
    38. 38. 60 / 40
    39. 39. “In one Manhattan ZIP code, forexample, women account for63 percent of 22-year-olds.”
    40. 40. Really?
    41. 41. Conclusions & Even More Questions:Knowns:• Government support for real estate simply cannot last• Elites have turned against homeownership• Gen-Y Will Not Save Housing• Real Estate Agent: Loss of Value• REALTORS(R) Can’t Win the Fight Over PieUnknowns:• Will Europe hold up? Will China?• How will new laws, new taxes, & new regulations affect employment?Black Swan Events:• Open warfare• Currency Collapse• Zombies
    42. 42. so... what do we do about this?
    43. 43. towards a solution
    44. 44. QuickTime™ and a decompressor are needed to see this picture.Gov. Chris Christie, February 16, 2011
    45. 45. “Our calling for greatness at thistime, is to confront these issues,say them out loud, stop playingaround, and not waste anotherminute.”
    46. 46. associations: reality check
    47. 47. #1 reason for joining? Access to the MLS
    48. 48. World Without MLS
    49. 49. crisis of identitycrisis of purpose
    50. 50. Three Identities of Associationsconsumerist unionist activistmembers are members are members are buyers workers activistsproducts and income political power services protectioncompetitors loss of franchise apathy
    51. 51. few love youmost don’t care about you some hate you
    52. 52. radical solutions for radical times
    53. 53. political actionpolitical actionpolitical action
    54. 54. old and busted
    55. 55. The New Hotness
    56. 56. precinct by precinctempowering the local activist
    57. 57. your greatest asset:members who are social
    58. 58. average: 190 friendsmedian: 100 friends
    59. 59. grassroots movementmembers as precinct captainsleverage social connectionsinfluence homeowners
    60. 60. member
    61. 61. member
    62. 62. consequences: intend to lose peoplesmaller, more focused, more engaged divest non-essential operations change in governance
    63. 63. If not now, then when? If not us, then who? - Hillel the Elder
    64. 64. Questions?Comments?
    65. 65. rhahn@7dsassociates.com @robhahn 973.869.9357

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