“The first rule of fight club is: You do not talk about fight club.”
Texas Realtors continue to throw money at bogus research at the Texas A&M Real Estate Center. Many Texas Realtors probably don’t even know that a portion of their annual licensing dues goes to pay the salaries of the staff at the RECenter. Many are probably unaware of how they are being shortchanged by this Texas institution which is still partnering with the Federal Reserve when it comes to economic research. That is a shame, because the garbage being produced by the RECenter economists continues to ignore the elephant in the room when it comes to Texas home prices or Texas home affordability.
In a recent piece for Tierre Grand, Dr Ali Anari spews a host of worthless statistics for a “study” of home affordability ratios. Dr. Anari talks about ratios in various Texas housing markets and concludes that the gap between home affordability here in Texas and other U.S. markets has narrowed since the Great Recession. Comically enough, he fails to mention why the affordability gap has narrowed. Apparently Dr. Anari is oblivious to the Federal Reserve’s market interventions in the housing market which fueled rampant home price inflation across Texas following the Great Recession.
Local factors surely account for some of the variance with home price inflation across various Texas housing markets, but that is just a small part of the story when it comes to Texas home price inflation and housing affordability during the last decade. The Federal Reserve’s financialization of U.S. real estate is the much larger story that the RECenter at A&M continues to ignore. It’s almost as if the RECenter at A&M has a policy manual for their economists expressly prohibiting a discussion of this dynamic.
Until something changes with the leadership at the the A&M RECenter, it appears any discussion of the Federal Reserve’s entanglement in the housing market will be off limits. The RECenter will apparently continue float ridiculous statistics on affordability and price growth without even mentioning the root causes. According to TREC’s 2018 annual report, Texas Realtors paid over $6 million to the A&M Real Estate Center in 2018 for the privilege of being misinformed. (see page 28 for disbursement to the TAMU fund). Aside from producing lousy economic research ignoring the Fed, the A&M RECenter also had difficulty producing accurate press releases for the North Texas real estate market.
It would appear the Real Estate Center at Texas A&M is working in tandem with the Fed to extinguish their own credibility. If that is something they wish to do, so be it. That doesn’t mean Texas Realtors should be funding the endeavor.