Wednesday, July 20, 2011
It was big news in all the major headlines this week: Justin Bieber and Selena Gomez crashed someone’s wedding over the weekend. He heard them karaoke-ing one of his songs as he drove by and stopped the car. Who does that? What a fairytale wedding surprise (especially for the groom, surely). Why doesn’t stuff like this ever happen to us? The national promotion this couple got was incredible. They have set themselves up for a big future – we might just see them again soon on Dancing With The Stars!
The promotion of stuff – advertising – is a huge industry. And the companies behind the advertising wouldn’t keep doing it if it didn’t work. As we know, celebrities can have a big influence on us and our spending patterns. 50 Cent tells us to try Vitamin Water (“try it!”), we do. Kim K implies sketchers are what allow her workouts to be so productive, so we buy them. Oprah opens her mouth and we do whatever she asks of us. Stephen Colbert even has a sizable influence on Wikipedia (Bell!). The Colbert “bump” should not be taken lightly.
The National Association of Realtors (NAR) should take a cue. An industry that could surely use the benefit of a celebrity blessing has yet to go for the gold. Data released today shows the number of existing home sales in June continued to fall – by 0.8% over May and by 8.8% over last June. Overall, existing home sales have been on a downslide in 2011 (not good). Further, home starts (the number of new homes being built) have been stuck at an annual rate of around 600,000 since November 2008, compared to an average annual rate of over 1,700,000 during 2000-2007. In fact, since data was first collected in 1959, the average annual rate of home starts was over 1,000,000 until 2008. So although data released yesterday shows June home starts increased to 629,000, it is still well below the historical average and it will take a few months to see whether this is a one time increase or the start of an upward trend.
The number of home starts is important because of the value building stuff creates throughout all sectors of the economy: a “multiplier effect” spending boost from the wages and salaries of everyone involved in the process. Certainly the real estate market was overheated in the mid-2000’s and home values were unsustainably high. Still, with the lack of a rebound in home sales over the last 2 years it is clear the real estate market has a long road ahead. For many of us, our wealth is dependent on the value of our homes, and our jobs are dependent on construction so this is important. Perhaps multiple celebrities should be involved.
To this end, the NAR should take action. If Jennifer Lopez can sing private weddings, certainly appearing at a house closing ceremony isn’t outside of the realm of possibility. The NAR should consider offering such a prize as part of a contest for all homebuyers. They could even make a reality show around it (hey, we can’t get enough of that type of stuff). It shouldn’t be that hard; many celebrities donate their time to great causes, like the Make a Wish Foundation. Without action, the real estate industry may turn into just an important a cause!
(National Association of Realtors, Census Bureau)