The real estate market may be booming again, but the nation's top Realtor group says it will lose money over the next couple years.
The National Association of Realtors says it will come up short by more than $1.3 million between 2014 and 2016. In order to plug this budget gap, the Washington-based trade group says it will be forced to dip into its reserves, Inman News reports.
Why the losses? After all, the bear market in real estate is fast becoming history and housing is hot, hot, hot again.
"We've been feeling the pinch of the times. Our non-dues revenues are still healthy, but it's not what it was once," John Pierpoint, NAR's comptroller, told Inman News back in mid-May.
Now that really clarifies things. What's the "pinch of the times" supposed to mean?
The Great Recession is over and the real estate market is back. It reminds me of all the businesses who kept blaming 9/11 for their woes four, five and six years after the fact. It became something of a joke among business reporters at the paper I was working at then, Boston Herald if you care.
The formula was simple: Announce layoffs or some product disaster and then insert something about the post-9/11 business environment. You get the idea. At some point blaming the "economy" gets a little lame.
Chock full of detail, the Inman piece is great and thankfully offers lot of clues. (One caveat - the piece dates to mid-May. However, I could not find anything else written on this - the NAR numbers are private - and the budget crunch appears to be a long-term issue for the trade group, not a short-term flucutation.)
While some of it is a revenue issue, NAR has also decided to spend more, and, borrowing a term often used by the feds, is characterizing it all as an "investment."
One of the biggest changes apparently was the end of an unspecified commercial partnership that had generated cash for NAR.
As a result, the trade group will be pumping an additional $900,000 into its business and marketing development program. NAR will also be spending hundreds of thousands more on executive offices, lobbying and online and print publications, as well.
OK, what say you? Am I being a bit harsh? What's your budget advice to the Realtors group?
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