No matter the condition of the housing market, count on the National Association of Realtors to promote that there has never been a better time to buy.  Today, however, they are saying that there has never been a better time for the government to rush in to stimulate buying.  
    "We should extend the first-time buyer tax credit to all homebuyers and

eliminate the repayment feature, and make permanent the higher loan limits that are vital in high-cost markets," said NAR President David McMillan today in announcing another disastrous month of home sales.  "The faster we do this, the faster housing and the economy can recover."   
    The "We" he refers to, of course, is the U.S. government and "we" taxpayers.  And the "high-cost markets" he mentions are largely that way because of the irrational exuberance the NAR fed to the media, blithely ignoring all logic and warnings to the contrary from real economists like Dr. Robert Shiller of Yale.  Does the housing market need more steroids?

 

Cracker Jack box economics
    We cannot expect mea culpas from the NAR, but the organization's continuing ignorance of logic is disconcerting.  Here's the NAR's chief economist, Lawrence Yun, piling on today to his boss's warnings with his own set of the dire consequences if the government doesn't pump the housing market full of steroids.
    "Falling home prices would lead to faster contraction in consumer spending and further deterioration in bank balance sheets," Yun said.  "More importantly, falling home values would lead to higher loan defaults, including those recently modified distressed mortgages."  Well, Mr. Chief Economist, thanks for the exquisite analysis.  You are, oh, about eight months late!
    Leave it to the NAR Cracker Jack box economists to ignore reality if it

complicates their own simple solutions.  Take the reality of employment figures, for example.  People do not buy homes, no matter how much incentive you give them, if they do not have a job or fear for the security of the one they have.  That is the core issue regarding home ownership now, not tax credits and higher loan limits. The folks at NAR HQ need to get out of the office and talk to real people or, maybe, their own members to understand fundamental consumer sentiment.

Too many agents, too few houses
    Of course, trade associations are supposed to argue for their members and their industry, but not when it contravenes logic and adds fuel to the fire.  The NAR did no favors for its members when it fed a lazy and ignorant media and the media in turn fed dreamers young and old about how real estate prices would ascend forever, and how buyer and seller and agent would be rich and live happily ever after.  To every dreamy eyed retiree with some time on her hands or the hairdresser, mechanic or car salesman who bought the media's hooey about the market, a career as a real estate agent seemed like an easy way to mint money.  
    Thousands of new agents joined the ranks of realtors just in time for the irrational exuberance to get a dose of rational reality.  Now we had way too many agents chasing fewer and fewer houses, and the less veteran among them didn't hesitate to tell Joe Seller that, "Sure, I can sell your $300,000 house for $400,000, no sweat."  Irrationally over-priced houses in a plummeting market exacerbated the problem.  Real estate agents have to put food on the table too, and with brutal competition among them and just a few months of experience under their belts, many ignored (or didn't see) the obvious consequences of their buyer clients taking on debt they obviously could not afford to repay.

What's good (for the industry), or what's right?
    We have all read about how the lenders, the ratings agencies and Wall Street led us to where we are now.  But the NAR too abrogated its fiduciary responsibility, as did a relatively few unethical agents, by not warning about the consequences -- personal and national -- of toxic lending practices.  Directly or indirectly, the NAR encouraged the thieves at Countrywide Financial and other lenders to push sub-prime loans on folks who had zero hope of paying them off.  If the NAR had its way, their behavior seems to suggest, the homeownership rate in America would be 100%, even if 40% of homes were in foreclosure.  (Why not, since banks, after all, hire real estate agents to help them sell the homes they are stuck with?)
    No, don't expect to hear a mea culpa from the folks at the NAR.  Rather than confronting the current mess with an honest discussion of how they can best serve their constituents and the national interest at a time of crisis, they have taken their hand out of one cookie jar and extended it toward a much bigger one.

The 11th green at Crail Balcomie Links is shared with the 8th green (background).  At any one time, eight players plus caddies share the large expanse.

    Yesterday, I wrote about the Old Course at St. Andrews, a dream come true for me after 50 years of golf.  Nevertheless, it was an expensive dream; the round cost my son and me about $700 US because of a brutal exchange rate between pound and dollar.  The dollar/British pound exchange rate is more favorable now by almost 50%, making a golfing trip to Scotland somewhere between fairly expensive and outrageous.  If a trip to the Old Sod is on your wish list, I offer a few tips to ease the burden somewhat.  
    Mid-June was perfect from a weather and traffic standpoint, so if you have the flexibility to schedule a trip then, consider it.  Although you won't get much of a price break compared with the high summer season, your odds of avoiding persistent bad weather are better than earlier in the year.  (Note:  The driest areas of Scotland suffer 150 days with rain annually, the wettest 250, so bring raingear no matter when you visit.)  In seven days of golf, we were rained on only for about six holes on two different golf courses.  It went from spring to winter to spring in the course of three holes at the Old Course.  Overall, we were exceedingly lucky.     

    In July, the crowds begin to increase, limiting your chances for having your name pulled out of the ballot box at the Old Course.  You can sign up for a stay-and-play package and have your tee times prearranged, but that costs more and will box you into staying at one of the more expensive hotels.  The other thing -- and some chauvinists might object to me saying this -- is that in the high season for tourists, you have the greatest chance of hearing a substantial amount of American English spoken on the city streets, around the practice greens and in the local pubs.  That may be either comforting or off-putting when visiting another country, depending on your point of view.
    Rather than pay the high cost of the more upscale hotels, you might consider a stay at one of the smaller bed and breakfast inns within a half hour of St. Andrews.  We stayed in the charming fishing village of Crail, just nine miles from the Old Course and featuring two outstanding links courses in town.  I thought Crail Balcomie Links, the 13th-oldest course in the world, was almost the equal of the Old Course experience, and for a lot less in green fees.  We stayed in a private house courtesy of a home exchange -- click here for more information and see below -- but I just checked prices for June at the Caiplie House , a bed and breakfast inn in Crail, and a double room is running about $550 US for a week's lodging.  There are other choices as well in Crail and the nearby towns.  Crail itself doesn't offer much in the way of dining options, but St. Andrews to the north does, and some of the towns south of Crail, such as Anstruther, have a fair complement of restaurants.  Crail is surrounded by great golf, including Kingsbarns and the new Castle Course in St. Andrews, and some excellent courses, like Lundin, Elie and Leven Links to the south.  None of these is more than a half-hour away.
    If you like the dollar exchange rate today and can commit to your Scottish golf vacation, consider booking your tee times and accommodations and paying as soon as possible.  You run the mild risk that the dollar will become more favorable in the exchange rate game, but the greater risk is that it will go so far the other way as to make you think twice about going.  At least you will know in advance how much you will be paying and can budget for it and then dine appropriately -- in better restaurants if a favorable exchange rate, or maybe ratchet back your dining excursions a little if the dollar nosedives again.  The abovementioned Caiplie House offers meals beginning around $18 US, not a bad price in our experience.   Truth be told, the food in St. Andrews and the surrounding areas was generally no better than okay.  The beer, of course, is great.
    Finally, if you want to avoid lodging charges altogether, and you own a home you think someone from Scotland might want to stay in, you can consider signing up for an international home exchange program.  Don't dismiss the desirabilty of your home; I heard from a couple in Edinburgh recently that they have exchanged with people in suburban Connecticut, and had a great time.

    There are a few such exchange programs, including HomeLink International, which we use.  We had a tremendous initial experience with our swap with George and Dorothy Horsfield of Glasgow.  They stayed at our place in South Carolina last April, and we stayed at their cottage in Crail in June.  Any anxieties we might have had about our first such exchange melted after a few email exchanges between George and me.  We even were able to play a couple of rounds of golf with them at Crail and Scotscraig, the 7th oldest course in the world.  Best of all, we have made friends for life.

    If you have any questions about our golf vacation or the home swapping program, please contact me.

The fishing village of Crail is picture-postcard perfect, and with reasonably priced lodging and two splendid golf courses in town, it is a great alternative to the higher priced accommodations in St. Andrews.