Archives: articles and books

Welcome to the Archives -- Articles and forecasts from the past.

What If They Gave a Party and No One Came?
by John Tuccillo, PhD
August, 2003

It’s not just housing any more. Increasingly, the economic news is turning better. Consumer confidence is up, the stock market is rallying and interest rates are still low (even though they are now rising), thanks to Mr. Greenspan’s caution. The tax cut of 2003 will become effective in the latter part of the
year and help consumer spending. The long awaited recovery appears to be finally here and most analysts think that the second half will show solid growth. But (as they say in the infomercials), wait, there’s more! If this is a recovery, why have we lost almost three-quarters of a million jobs since January 2003?

>>more>>

Lights! Camera! Action!
by John Tuccillo, PhD
June, 2003
Life certainly imitates art. Seeing pictures of advancing American (or coalition) force in the Iraqi desert reminds me of a scene out of “Star Wars”. The new language of war—weapons of mass destruction, embedded news people, evildoers, and other words no one uses in normal conversation sounds like newspeak from 1984. The constant polling to see if Americans favor the war brings back memories of the great movie, “Network.” All that’s missing is the Marx Brothers singing, “To war, to war; we’re gonna go to war” as they march off to defend fair Fredonia. No wonder they call the site of battle the theater of war.

>>more>>

Taking Your Vows, Part II: Fiduciary Responsibility and Electronic Data Display
by John Tuccillo, PhD
June, 2003

One of the most useful rules of life you can ever learn is the Campus Walkway Theory of Rule-Making. It comes from the development of paths on a college campus. The students determine where the walkways will be by simply walking where they will. When the grass is worn away, the pavers come in and
create the asphalt trail. What this says is that the market will tell you what works and what doesn’t and any attempt to preempt the prerogatives of the market will invariably fail.

And so we come to NAR’s recent rule-making on virtual office websites (VOWs). The rules are meant to control the real estate market by controlling who can have a VOW and how they must be presented. The rules target third parties (e.g. newspapers) who would put up a VOW, entice the public and then refer the leads to Realtors® for a fee. Since (goes industry reasoning) these were leads that would have come in anyway, essentially third party VOWs are stealing business away from real estate professionals. Parenthetically, the
rules are also meant to contain maverick real estate companies like eRealty that have put up VOWs with good success.

>>more>>

What's Next?
by John Tuccillo, PhD
Reprinted from "Real Estate Professional,"
Winter, 2002

As we begin 2003, it's uncertain as to where the economy is headed. The final numbers are not yet out on the holiday season just past and they will largely tell the tale. But shoppers were out in great numbers and, despite the deep discounts offered by most sellers, they appeared to have surpassed 2001 in their spending. The question is whether the number is 2.5 percent higher as predicted by most analysts or not. If it falls short, the working assumption will be that there will be another recession in 2003. We also do not yet know whether or if there will be a hot war in Iraq and what that will do to the economy. The Gulf War had little impact on the economy, but that may have been because it was so short. This one will probably be longer, so its impact is uncertain.

Clearly, in forecasting the future, the professional must rely on Rule #2: Your guess is as good as mine. Even if we don't know what's happening, we can certainly enumerate the forces that will shape the economy in the next twelve months:

>>more>>

Slip Slidin' Away
by John Tuccillo, Economist, PhD
Scottsdale Association of Realtors® November, 2002

The Fed cut interest rates on November 6. It was an uncharacteristic gesture. After nearly a year of watching and hoping that the economic recovery would catch and grow, Mr. Greenspan had to concede to the views of his less optimistic colleagues and lower rates. There is more than a hint of panic surrounding the decision. Rates are now as low as they have been in forty years, and while this may be good for real estate, it suggests that we are in uncharted territory with this economy.

Pessimists are suggesting that the American economy is heading down the same deflationary path that now plagues Japan. They point to low interest rates, declining rates of inflation and weak business investment. They say that the economy is headed into a downward spiral that has all the attractive power of a black hole.

>>more>>

In A Dry Season
by John Tuccillo, Economist, PhD
Real Estate Professional, August 2002

Forest fires have been one of the key themes of news during this summer. Large portions of Arizona, Colorado and Oregon have been devastated by the blazes and even the venerable and treasured giant sequoias of California have been threatened. While other stories have come and gone, the sheer fact that the forests were being consumed remained a constant. The American economy has been threatened by another kind of forest fire, the collapse of the stock market in the wake of the scandals rocking American business. And the devastation, while less obvious, has been no less severe.

The failures of Enron, Global Crossing, K Mart and World Com, along with the shadows cast on such institutions as Martha Stewart, have introduced significant doubts among investors. Was the bull market of the Nineties a sham? Is there any real value in the market? Can we trust the reported earnings of American corporations? Seemingly, investors have answered yes, no and no. More importantly, "investors" has become a much more inclusive term. As a result of the expansion of the Nineties, half of all American households now own corporate equities, either directly or through retirement plans. While the word "panic" is too strong, widespread concern about the market is all too much with us.

>>more>>

The New Consumer
by John Tuccillo, Economist, PhD
Real Estate Professional, April/May, 2002

Enron's accountants seemingly believe that the world is populated by two kinds of people: those who can count and those who can't. I believe, as some of you know, that the real estate world is divided into two parts: Consumers who use the Internet and those who don't. The former are increasing and the latter declining. I don't just mean here consumers who look at listings on he Net; they are very large in number. I really mean those who use the Internet to find a property, to find an agent and even to execute portions of the real estate transaction on line.

>>more>>

Targeting the Over-55 Consumer: Here Come the Boomers!
by John Tuccillo, Economist, Ph.D.
May, 2002

Senior housing has often meant assisted care, or inexpensive condos in the sun, or some such other marginal part of the shelter sector. Well, as my late Italian grandmother would say, '"Fuggedaboudit!" From now on, senior housing will grow to be a major (if not the major) segment of the market for the next two decades. And it's all about aging baby boomers who will dominate the housing market as they have dominated every aspect of American life since 1950. For Realtors, this is a huge opportunity. But seizing that opportunity will require some care and applied expertise.

>>more>>

The Recession That Wasn’t There
by John Tuccillo, Economist, Ph.D.
March, 2002

What happened? Did anyone get the license number of that truck? The economy got run over by a recession that blew past like a hit and run driver. It’s here; it’s gone. Just that fast. Or at least that’s what the pundits would have us believe. Not wanting to be a messenger of gloom, I still must point out, like Yogi Berra, that it ain’t over ‘til it’s over. And I don’t think it’s over yet.

>>more>>

Cleaning House
by John Tuccillo, Economist, Ph.D.
March, 2002

When a college athletic program comes under investigation by the NCAA, the degree to which penalties are levied are inversely proportional to the degree of cooperation on the part of the university. If the guilty are fired and if the institution penalizes itself, then external sanctions will be lighter. The ability of contrition to ease punishment is a constant in life, whether in the criminal court system, the NCAA or the Catholic Church. And now we have two marvelous examples of the rule, one very close to home.

>>more>>

Buffett on Real Estate
by John Tuccillo, Economist, Ph.D.
Real Estate Professional, Nov/Dec, 2001

Buffett’s Rule for Baby Boomers: Invest like Warren, live like Jimmy

The richest man in the world and the most laid-back man in the Western hemisphere share the same last name and each in his own way is a fountain of wisdom. So let’s take some of their wisdom and apply it to the current state of the real estate business. Of course, you have to guess which Buffett is the source of the wisdom, but that shouldn’t be too hard.

>>more>>

What’s A Mother To Do?
January, 2002
by John Tuccillo, PhD
Principal, JTA, Inc.

OK, it’s official; we’re in a recession. The National Bureau of Economic Research, the official scorekeeper for such things has proclaimed that it began in March. The holiday buying season belies this, of course, as do the lines at theaters featuring Harry Potter. But business investment has sagged badly, and the disruption following the September attacks hurt enough to generate the slowdown. When it will end is anyone’s guess, although the betting choice is the second quarter of 2002. For what it's worth, I like that time, although growth will probably be weak until the second half of the year.

>>more>>

Key Indicators
by John Tuccillo, PhD

A great deal of the current concern about the economy is psychological. The economy is slowing, the key indicators are below where they were even six months ago, and the stock market plunge has reduced wealth, both real and perceived. But another element, one that carries great weight, is that we have experienced such a long and strong expansion and in contrast things now look (the following is a technical economics term - do not attempt to use it at home) really lousy.

>>more>>




	What's John thinking? Where is John? About JTA. Contact JTA.		Welcome to the Archives -- Articles and forecasts from the past. What If They Gave a Party and No One Came? by John Tuccillo, PhD August, 2003 It’s not just housing any more. Increasingly, the economic news is turning better. Consumer confidence is up, the stock market is rallying and interest rates are still low (even though they are now rising), thanks to Mr. Greenspan’s caution. The tax cut of 2003 will become effective in the latter part of the year and help consumer spending. The long awaited recovery appears to be finally here and most analysts think that the second half will show solid growth. But (as they say in the infomercials), wait, there’s more! If this is a recovery, why have we lost almost three-quarters of a million jobs since January 2003? >>more>> Lights! Camera! Action! by John Tuccillo, PhD June, 2003 Life certainly imitates art. Seeing pictures of advancing American (or coalition) force in the Iraqi desert reminds me of a scene out of “Star Wars”. The new language of war—weapons of mass destruction, embedded news people, evildoers, and other words no one uses in normal conversation sounds like newspeak from 1984. The constant polling to see if Americans favor the war brings back memories of the great movie, “Network.” All that’s missing is the Marx Brothers singing, “To war, to war; we’re gonna go to war” as they march off to defend fair Fredonia. No wonder they call the site of battle the theater of war. >>more>> Taking Your Vows, Part II: Fiduciary Responsibility and Electronic Data Display by John Tuccillo, PhD June, 2003 One of the most useful rules of life you can ever learn is the Campus Walkway Theory of Rule-Making. It comes from the development of paths on a college campus. The students determine where the walkways will be by simply walking where they will. When the grass is worn away, the pavers come in and create the asphalt trail. What this says is that the market will tell you what works and what doesn’t and any attempt to preempt the prerogatives of the market will invariably fail. And so we come to NAR’s recent rule-making on virtual office websites (VOWs). The rules are meant to control the real estate market by controlling who can have a VOW and how they must be presented. The rules target third parties (e.g. newspapers) who would put up a VOW, entice the public and then refer the leads to Realtors® for a fee. Since (goes industry reasoning) these were leads that would have come in anyway, essentially third party VOWs are stealing business away from real estate professionals. Parenthetically, the rules are also meant to contain maverick real estate companies like eRealty that have put up VOWs with good success. >>more>> What's Next? by John Tuccillo, PhD Reprinted from "Real Estate Professional," Winter, 2002 As we begin 2003, it's uncertain as to where the economy is headed. The final numbers are not yet out on the holiday season just past and they will largely tell the tale. But shoppers were out in great numbers and, despite the deep discounts offered by most sellers, they appeared to have surpassed 2001 in their spending. The question is whether the number is 2.5 percent higher as predicted by most analysts or not. If it falls short, the working assumption will be that there will be another recession in 2003. We also do not yet know whether or if there will be a hot war in Iraq and what that will do to the economy. The Gulf War had little impact on the economy, but that may have been because it was so short. This one will probably be longer, so its impact is uncertain. Clearly, in forecasting the future, the professional must rely on Rule #2: Your guess is as good as mine. Even if we don't know what's happening, we can certainly enumerate the forces that will shape the economy in the next twelve months: >>more>> Slip Slidin' Away by John Tuccillo, Economist, PhD Scottsdale Association of Realtors® November, 2002 The Fed cut interest rates on November 6. It was an uncharacteristic gesture. After nearly a year of watching and hoping that the economic recovery would catch and grow, Mr. Greenspan had to concede to the views of his less optimistic colleagues and lower rates. There is more than a hint of panic surrounding the decision. Rates are now as low as they have been in forty years, and while this may be good for real estate, it suggests that we are in uncharted territory with this economy. Pessimists are suggesting that the American economy is heading down the same deflationary path that now plagues Japan. They point to low interest rates, declining rates of inflation and weak business investment. They say that the economy is headed into a downward spiral that has all the attractive power of a black hole. >>more>> In A Dry Season by John Tuccillo, Economist, PhD Real Estate Professional, August 2002 Forest fires have been one of the key themes of news during this summer. Large portions of Arizona, Colorado and Oregon have been devastated by the blazes and even the venerable and treasured giant sequoias of California have been threatened. While other stories have come and gone, the sheer fact that the forests were being consumed remained a constant. The American economy has been threatened by another kind of forest fire, the collapse of the stock market in the wake of the scandals rocking American business. And the devastation, while less obvious, has been no less severe. The failures of Enron, Global Crossing, K Mart and World Com, along with the shadows cast on such institutions as Martha Stewart, have introduced significant doubts among investors. Was the bull market of the Nineties a sham? Is there any real value in the market? Can we trust the reported earnings of American corporations? Seemingly, investors have answered yes, no and no. More importantly, "investors" has become a much more inclusive term. As a result of the expansion of the Nineties, half of all American households now own corporate equities, either directly or through retirement plans. While the word "panic" is too strong, widespread concern about the market is all too much with us. >>more>> The New Consumer by John Tuccillo, Economist, PhD Real Estate Professional, April/May, 2002 Enron's accountants seemingly believe that the world is populated by two kinds of people: those who can count and those who can't. I believe, as some of you know, that the real estate world is divided into two parts: Consumers who use the Internet and those who don't. The former are increasing and the latter declining. I don't just mean here consumers who look at listings on he Net; they are very large in number. I really mean those who use the Internet to find a property, to find an agent and even to execute portions of the real estate transaction on line. >>more>> Targeting the Over-55 Consumer: Here Come the Boomers! by John Tuccillo, Economist, Ph.D. May, 2002 Senior housing has often meant assisted care, or inexpensive condos in the sun, or some such other marginal part of the shelter sector. Well, as my late Italian grandmother would say, '"Fuggedaboudit!" From now on, senior housing will grow to be a major (if not the major) segment of the market for the next two decades. And it's all about aging baby boomers who will dominate the housing market as they have dominated every aspect of American life since 1950. For Realtors, this is a huge opportunity. But seizing that opportunity will require some care and applied expertise. >>more>> The Recession That Wasn’t There by John Tuccillo, Economist, Ph.D. March, 2002 What happened? Did anyone get the license number of that truck? The economy got run over by a recession that blew past like a hit and run driver. It’s here; it’s gone. Just that fast. Or at least that’s what the pundits would have us believe. Not wanting to be a messenger of gloom, I still must point out, like Yogi Berra, that it ain’t over ‘til it’s over. And I don’t think it’s over yet. >>more>> Cleaning House by John Tuccillo, Economist, Ph.D. March, 2002 When a college athletic program comes under investigation by the NCAA, the degree to which penalties are levied are inversely proportional to the degree of cooperation on the part of the university. If the guilty are fired and if the institution penalizes itself, then external sanctions will be lighter. The ability of contrition to ease punishment is a constant in life, whether in the criminal court system, the NCAA or the Catholic Church. And now we have two marvelous examples of the rule, one very close to home. >>more>> Buffett on Real Estate by John Tuccillo, Economist, Ph.D. Real Estate Professional, Nov/Dec, 2001 Buffett’s Rule for Baby Boomers: Invest like Warren, live like Jimmy The richest man in the world and the most laid-back man in the Western hemisphere share the same last name and each in his own way is a fountain of wisdom. So let’s take some of their wisdom and apply it to the current state of the real estate business. Of course, you have to guess which Buffett is the source of the wisdom, but that shouldn’t be too hard. >>more>> What’s A Mother To Do? January, 2002 by John Tuccillo, PhD Principal, JTA, Inc. OK, it’s official; we’re in a recession. The National Bureau of Economic Research, the official scorekeeper for such things has proclaimed that it began in March. The holiday buying season belies this, of course, as do the lines at theaters featuring Harry Potter. But business investment has sagged badly, and the disruption following the September attacks hurt enough to generate the slowdown. When it will end is anyone’s guess, although the betting choice is the second quarter of 2002. For what it's worth, I like that time, although growth will probably be weak until the second half of the year. >>more>> Key Indicators by John Tuccillo, PhD A great deal of the current concern about the economy is psychological. The economy is slowing, the key indicators are below where they were even six months ago, and the stock market plunge has reduced wealth, both real and perceived. But another element, one that carries great weight, is that we have experienced such a long and strong expansion and in contrast things now look (the following is a technical economics term - do not attempt to use it at home) really lousy. >>more>>