Assisted living San Antonio choices range from meager facilities that would make a Motel 5 1/2 feel like the Taj Mahal – one was even recently shut down by authorities – to the finer facilities like Franklin Park – http://www.franklinpark.org/our-communities/sonterra

Make the finer choice. Franklin Park, San Antonio TX

Stone Oak facility

FRANKLIN PARK STONE OAK 21802 Encino Commons San Antonio, TX 78259 (210) 483-9999

Sonterra Facility

FRANKLIN PARK SONTERRA 18323 Sonterra Place San Antonio, Texas 78258 (210) 404-1444

In front of the old courthouse in Historic Downtown Santa Ana, California.

Photography rule of thirds blog

Back in 2006, smart money was in real estate and the stock market, but a lot of smarter money, by some accounts up to a trillion dollars had quietly moved into the annuity market. Fixed and indexed annuities were not producing the same spectacular levels of return as securities but they were obviously a whole lot safer. With rates like 8% in good markets and guaranteed 3.4% to 4% even in a market collapse, long term safety minded investors moved away from a markets that looked like they were in a bubble that would burst sooner or later.

Sooner came in 2008 and billions of dollars of investment money was preserved for the owners of annuity products while higher risk investors bled to death on the stock trading floor.

How does this relate to the real estate industry?  More on that at the end of this post.

The backdrop of all this comes into view with the announcement of Hartford that they are exiting the annuity and life business entirely. 

What brought an insurance giant to this surprise announcement? I believe it all started back in 2006 or so when the SEC announced that it believed that the sale certain annuity products should be supervised. Soon after, the push came when the SEC corralled all insurance agents who also held a securities licence into a regulatory sandtrap, pressuring insurance agents to submit these annuity sales for supervision with the threat of losing their license if unsupervised annuity sales were found in any way to violate well, anything they could come up with. This effectively killed the sale of annuities for a lot of insurance agents who feared risking their license. 2008 brought the hammer down by trying to implement rule 151A, requiring the supervision of indexed annuity sales. Indexed annuities provide for better returns in good stock market years while guaranteeing a minimum return every year regardless of market performance.

Ultimately, rule 151A was struck down but the push continues as it always has, to keep investor money away from insurance products whether investors are safer with these products or not.

The securities industry had lost billions to fixed and indexed annuities and they’d had enough. This hatred of the insurance industry isn’t new. I found an excerpt from a 1956 business section of a Pittsburg newspaper that reported the same kind of tactic engaged in by the SEC back then when I wasn’t even yet a twinkle in my father’s eye.

What this has to do with real estate…

Organizations love power. The bigger the organization the more power they seek. This acquisition of power is generally thought to be in the interest of the members of the organization but sometimes those members represent a factional segment of an even larger group who may or may not benefit or even suffer harm at the hands of the faction.

Let’s take the NAR for example. 

I clearly remember frequent advertisements including TV ads by the NAR throughout the plummeting of the real estate market that continually sounded out the same message to anyone foolish enough to listen, 

“Now is the best time to buy a home.”

It didn’t matter that the collapse was just starting, or mid-way or that there was absolutely no assurance that things had hit bottom, and anyone who bought a home was going to have their hair cut off and eyes gouged out like Sampson at the hands of Delilah.

The NAR didn’t mind at all what might happen to unwitting home buyers. “There was never a better time to buy a home.”

Really? How about later, much later if you can hold out. If home prices had a further slide to go, they why not encourage consumers to wait it out. Rent for another year and see what happens?

Of course this doesn’t help the real estate industry to say such things, but it would have helped a lot of consumers who had no business buying a home in the middle of a crash.

The NAR was simply willing to trample underfoot the financial health of a whole lot of sheep who didn’t have the saavy to analyze for themselves what was going on in the real estate sector. Any economics professor worth their weight in recycled copper will tell you that overly-aggressive lending made it too easy to buy a home. The notion that every person  was somehow entitled to own a home came straight from the left and the likes of ACORN and our illustrious community organizer in chief.

Now we all pay dearly. Agents pay more for real estate SEO, websites, print media, direct mail, etc. to market the same properties to sell at greatly reduced prices. Homeowners pay in balloon payments, foreclosures, short sales and in being trapped in homes deep underwater so that they cannot move when opportunity for improvement presents itself in the form of jobs or better local economies to do business elsewhere.

Did I mention this is an opinion piece?  Nevertheless a warning is to be had and heeded about trusting organizations including government cliques and factions that are obviously not really looking out for your best interest.