Monday, March 13, 2006

NAR Puts Positive Spin On Drop In Sales

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The National Association of Realtors is retreating from its forecasted sales for 2006. There are several media reports, including one at Inman News.

The actual press release from the NAR is available at US Newswire.

You have to laugh at NAR Chief Economist David Lereah's spin. He now couches the increase in inventory as being an improvement that's been going "nicely." Ha.

Here's what Lereah said in January:
“The level of home sales activity is now at a sustainable level, and is likely to pick up a bit in the months ahead. Overall fundamentals remain solid, driven by population and employment growth as well as favorable affordability conditions in most of the country, so we expect the housing market to remain historically high but lower than last year’s record.”
Here's what he said in the NAR press release that came out today:
"The cooling from overheated sales conditions in recent months is helping to bring inventory levels up to the point where buyers have more choices than they've seen in the last five years. Annual price appreciation is still running at double-digit rates, but the cause of those sharp increases is going away. As the market readjusts, price appreciation should return to more normal rates of growth this year."
Whew, you can almost feel the breeze when he backpedals like that.

It's still not as good as when he tried to explain in a semantical argument with Gwen Ifill that balloons don't burst.

Today's press release says that "The national median existing-home price for all housing types is projected to rise 5.8 percent in 2006 to $220,300. The median new-home price should increase 5.4 percent this year to $250,200."

It also predicts that: "Existing-home sales are expected to fall 5.7 percent to 6.67 million in 2006 from the record 7.08 million last year. At the same time, new-home sales are forecast to decline 7.7 percent to 1.18 million from a record 1.28 million in 2005 -- each sector would be at the third highest year following the tallies for 2005 and 2004. Housing starts are likely to total 1.98 million this year, down 4.3 percent from 2.06 million in 2005."

— The Boy in the Big Housing Bubble