Friday, September 08, 2006

Too Little Too Late

From Motley Fool:

Housing Cheerleaders Losing Pep

I've spent the past few months casting a hairy eyeball at a lot of the pro-housing hypesters out there, the folks I feel have cheered on a dangerous bubble with little regard to the potential dangers to consumers' pocketbooks or the economy at large.

So I want to be sure to offer a golf clap to one of the outfits that's been in my crosshairs, the National Association of Realtors (NAR).

This organization exists to promote the well-being of all those folks out there who collect 6% every time we sell a home. Despite this obvious self-interest, the press out there in TV Land puts great -- to my mind, undue -- faith in the monthly pronouncements on the health of the real estate market that emanate from the NAR's head office. For the past couple of years, these have been positively bubblicious, to put it mildly.

I offer the golf clap because yesterday, for the first time that I can remember, it appears to me that the NAR came clean on the housing bubble, right out in public.

In this press release, David Lereah, the endlessly quoted chief economist for the organization, finally acknowledged openly that sales are tanking and prices going down. He used uncharacteristically firm language, tossing out lines such as,"...people who purchased last year with the intent of flipping are likely to get burned." Good on him, and good on the NAR.

Unfortunately, this may be too little, too late. After all, the NAR has been quietly admitting, for a few weeks now, that things are getting ugly in a lot of markets, and that a correction was necessary. This presentation on the NAR website shows the kind of candor the organization musters, at least when it's not sending out PR to the entire country.


Anonymous Anonymous said...


This post is very interesting, I am surprised nobody has commented. In the Motely Fool article there is a link to a NAR presentation, which is not the same as what they typically release to the press. It has the famous, or infamous depending on your view point "Chief Economist" delivering a definitely less ubeat message to the - as some posters here would call them - "Starving, No Commish" realtors. Some big observations from the presentation

1. He starts the cover with the picture of a bear!

2. He has a slide background of Bubbles throughout on his powerpoint presentation!

3. He expects prices to fall for the rest of this year!

4. Although he thinks nominal median prices will continue up in 2006, and 2007 (I am not convinced), He believes 2007 will be worse than 2006 in terms of price appreciation!

5. He has a chart going back to 2001 that clearly demonstrates that mid 2005 was the top of the bubblwe in terms of unit sales. Looking at this chart, it is hard to escaped the borrowed future buyers theory. Seems like prices must follow!

A lot here folks, Grim, would it be possible to repost that NAR presentation seperately so we can be educated by other insights people may draw, and also to show how different what these people tell the populace vs. what they say to themselves when the chips are down.

SJ Observer

9/09/2006 01:50:00 PM  

Post a Comment

<< Home