Globalization, Not Fed, Drove Housing Boom

Greenspan is on target. Interest rates had something to do with the housing boom, but something else contributed to the wild appreciation that we saw.

This can be proven by looking at other international “high profile” cities like London, Sydney, Hong Kong, Beijing, Sao Paulo. Each of these financial hubs have experienced significany appreciation over the past 10 years. However, interest rates in these counties did not drop to 1% like with the U.S. dollar. The Brazil Real for example experienced higher interest rates for most of these 10 last years.

The more the “international” middle class grows, the more the demand for real estate in major cosmopolitan cities. New York is #1 on the list. Miami is probably #2.

For what it is worth I have my own story of discriminatory practices at Corcoran. Back in 2001, I “discovered” Brooklyn Heights and decided that I would look for an apartment there. I went to Corcoran and met with a broker there (her name was Larisa Kogut – I will never forget it). Anyway about 10 seconds after I said hello, Ms. Kogut, without even asking about my finances went into a speech about how the co-op boards in BH were tougher than Manhattan and that the boards wanted buyers with lots of “assets” and that she did not think that i would make it. I guess she thought that black person could not have assets – she was wrong. I was shocked! I did buy an apartment in BH, it was a corcoran listing but I got it through another broker.

I will never list a property with Corcoran, since they control most of the Bklyn market, I am sure that I will buy from them.

I am so happy that they finally got caught!!!

Report Alleges Bias by a Real Estate Giant

By JANNY SCOTT
Published: October 11, 2006
The National Fair Housing Alliance, a consortium of 220 groups and individuals working against housing discrimination, charged yesterday that agents in the Brooklyn Heights office of the city’s largest residential real estate brokerage, the Corcoran Group, had engaged in discriminatory sales practices, including racial steering and withholding information from African-American clients.

“During our 16 years of existence, the National Fair Housing Alliance has never seen such a literal and blatant example of sales steering,” the group wrote in a report detailing its allegations. In that particular instance, the report said, an agent “produced a map of Brooklyn and drew a red outline of the areas in which the white home seeker should consider living.” The agent used arrows to indicate neighborhoods that were “changing.”

“This racial steering tactic is reminiscent of discriminatory conduct from the 1970’s, when real estate agents would go into white neighborhoods with the specific intention of triggering white flight by showing on a map where an African-American family had bought a house,” the alliance wrote. “This Corcoran Group agent applied a new trick — he used a map to tell whites instead where they should ‘flee to.’ ”

Pamela Liebman, president and chief executive officer of Corcoran, said in an interview yesterday that her firm “has always been devoted to fair housing” and recently required all of its agents to undergo four hours of training in fair housing law and practices.

She said, “I have never been given the specific charges as they relate to the Corcoran Group and I anxiously await them as we intend to defend ourselves vigorously.”

She said she could not comment further on the allegations because she had not seen them.

Shanna L. Smith, president of the alliance, said her group conducted the investigation under contract with the federal Department of Housing and Urban Development, following up on earlier housing discrimination findings in a 2000 H.U.D. report. She said the alliance has filed a complaint with the housing agency against Corcoran and its parent company, NRT Inc. NRT describes itself as the nation’s largest residential real estate brokerage firm, with companies in more than 35 metropolitan areas and more than 1,000 offices.

In its report, the alliance said the investigation of the Corcoran office “uncovered blatant housing discrimination against African-Americans, as well as steering of whites away from neighborhoods of color and to Prospect Heights, Park Slope, Windsor Terrace, Cobble Hill, Brooklyn Heights and parts of Carroll Gardens.” It said agents withheld from black clients information about incentives, like ways to reduce costs, that it gave to white clients.

The alliance said it conducted the investigation by sending white and African-American “testers” into the office posing as potential home buyers. The black testers were better qualified than the whites, based on income, employment and other factors.

Corcoran announced late last month that it was devoting the month of October to training its agents in the country’s fair housing laws, which prohibit discrimination in housing based on race, color, religion, sex, national origin and other factors. Ms. Liebman, who said she received three days’ worth of “diversity training” in 2003, said that month of training for agents was initiated before Corcoran knew of the alliance’s allegations.

what would life have been like for the past 5 years without the so called bubble…for all I know this blog would even exist, and many of the homes that changed hands would still be on the market. I know I’m off topic, but I’m beyond pointing the finger.