I for one am happy to see the National Association of Realtors raise its dues by $40.   Realtors must now pay $120 per year instead of $80 per year to NAR.  I am sure Realtors everywhere are going to be all riled up about this price hike.  Frankly, they should have doubled it and that would have been a good start.  Perhaps we will eliminate a 100,000 – 200,000 Realtors across the country because of the $40 hike…I’m not kidding.

Many local associations across the country are against the hike because they won’t get their dues as people will start fleeing the business.  (I’ve not yet read a comment from the Minnesota Association or the Minneapolis Association). What the public doesn’t understand is that the real estate business is built around shear numbers and not necessarily quality.

The way the real estate model works is the brokers, local/state/national associations just want bodies…lots of bodies.  They need lots of them to pay their dues.  That’s unfortunately, a big driver in this business.  It’s no wonder the public has such a low regard for Realtors.  Is it not justified based upon the business models the associations and brokers have set up?

The National Association of Realtors says they need more money to lobby politicians to defend private property rights that are under attack as well as to defend the industry.  I believe they need the money to defend the MID – mortgage interest deduction.  The is the mother load in the real estate industry.  I will write more on this in the future, but this is couched as a benefit for home ownership, and there’s no doubt it is, but in reality, I believe it’s a big Realtor subsidy and there is NO WAY the National Association of Realtors is going to let that go quietly in to the night.

What I’d like to know is given the U.S. government debt problem, spending problem, entitlement problem, is there not one group in the country that can stand up and take a leadership position on this?  Everyone wants everyone else to cut.  The Realtors are no different.  Perhaps they want to see reform in some other areas, but they say DO NOT TOUCH the MORTGAGE INTEREST DEDUCTION.  I say it’s time to put that deduction on the table now.  Everyone says we shouldn’t do this now especially since the housing market is so fragile.  I think they should do it now and get it over with.  I used to think we’d see another almost immediate 10-15% reduction in home prices, but now I’m not so sure.  I think there’s 5-10% downside risk already.  Would removing the MID make that any worse?  Not sure.

Watch for more turmoil from the Realtors.   I’m sure many will enjoy watching the implosion…especially the guys on the discussion board at Calculated Risk blog which I enjoy reading.