NAR throws in the towel on home prices
Incidentally, the folks at the National Association of Realtors just released their latest forecast for home sales, prices, and all that. Here's a Bloomberg story on the details. In a nutshell, the NAR is forecasting a 0.2% drop in new home median prices in 2006, which would be the first decline in 15 years. Also, they say existing home prices will end up rising 1.6% for full-year 2006. Bloomberg calls this the smallest gain on record.
Of course, it would have been nice for the NAR to release this useful information a year ago versus, say, this forecast from October 2005 saying that new home prices would rise 7.1% in 2006 and 5.2% for existing home prices.
And of course, there's this helpful issue of "Real Estate Insights" from August 2005. A synopsis of NAR Chief Economist David Lereah's commentary reads as follows ...
David Lereah's Economic Commentary: No Doom; No Gloom. Talk about a so-called "housing bubble" continues to be the topic from Wall Street to Main Street. But in order for the sky to fall -- for home prices to plummet -- there must be a significant drop-off in homebuying as well as a significant rise in housing inventories. The continued obsession with a "gloom and doom" scenario for housing is downright wrong.
Heaven knows I've made some bad calls in my lifetime. I get things wrong all the time. So I'm not pointing out these dramatically wrong forecasts to embarrass anyone. Instead, I'm making what I believe to be an extremely fair criticism: The NAR should have spent much less time cheerleadidenigratinggrating those of us warning about a housing bubble when things were going great. Instead, the group should have simply pointed out the obvious: A significant portion of the housing demand was "fake" investment-fueled demand, not demand from owner occupants. When it faded, so too would the housing boom. Talk about a wasted opportunity.
Of course, it would have been nice for the NAR to release this useful information a year ago versus, say, this forecast from October 2005 saying that new home prices would rise 7.1% in 2006 and 5.2% for existing home prices.
And of course, there's this helpful issue of "Real Estate Insights" from August 2005. A synopsis of NAR Chief Economist David Lereah's commentary reads as follows ...
David Lereah's Economic Commentary: No Doom; No Gloom. Talk about a so-called "housing bubble" continues to be the topic from Wall Street to Main Street. But in order for the sky to fall -- for home prices to plummet -- there must be a significant drop-off in homebuying as well as a significant rise in housing inventories. The continued obsession with a "gloom and doom" scenario for housing is downright wrong.
Heaven knows I've made some bad calls in my lifetime. I get things wrong all the time. So I'm not pointing out these dramatically wrong forecasts to embarrass anyone. Instead, I'm making what I believe to be an extremely fair criticism: The NAR should have spent much less time cheerleadidenigratinggrating those of us warning about a housing bubble when things were going great. Instead, the group should have simply pointed out the obvious: A significant portion of the housing demand was "fake" investment-fueled demand, not demand from owner occupants. When it faded, so too would the housing boom. Talk about a wasted opportunity.
posted by Mike Larson at
5:13 PM
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