Well, quite frankly they are simply doing their job, which is lobbying on behalf and marketing the interests of realtors in the US. The fact of the matter is that they not only undermine the credibility of all in the profession but purposefully mislead those who may not have the money to spare into flushing said hard earned dollars down the toilet, all of the sake of a 2.5% commission split. Let's take this step by step, shall we?
On Tuesday, February 22nd, 2011 at 3:14 pm I posted "When Will the Mainstream Media Be Ready To Call The NAR The Sham That It Really Is?" wherein I laughed at the WSJ article that illustrated where the NAR's housing data may have understated extend of collapse. But of course, it understated said collapse. If one were to peruse the history of the NAR and their paid marketers economists one will see a very long history of such.
The NAR video from 2008 saying that buying opportunities have never been better| buying now is a key to building long term wealth | there are a lot of buyers in the market to buy your home, etc. while I was saying the commercial and residential real estate markets are in the beginning of a long term collapse...
This is David Lereah, the NAR chief economist in 2006...
Then again, one can peruse David Lereah's literary prose, circa 2006-7...
Absolutely exquisite insight!!!
It's not just David. After moving on, Lawrence Yun (David's successor) got nearly 8 minutes on Bloomberg (hopefully, I will get the chance to get 10 or 15 minutes to truly illustrate the lay of the land from an unbiased, empirical, investor's perspective sometime soon) to say that 2008 was an opportune time for buyers who want to own a home
Here's Dr. Yun with more good news for home sellers in 2008. Ohhhh, the optimism!!!
In July 2008 Yun stated “I think we are very near to the end of the housing downturn,” Yun said (AP News).
Lawrence Yun, chief economist for the Realtors, said that the housing rescue bill should play a major role in helping the housing market to rebound. He said an especially significant feature is a tax break worth up to $7,500 for first-time home buyers who purchase between April 9 of this year and July 1, 2009. Yun estimated that up to 3 million first-time home buyers could qualify for that tax break, providing a significant boost to sales at a critical time. “I think we are very near to the end of the housing downturn,” Yun said.
As a point of reference..
Of course, I can go on…
In 2007 Lawrence Yun state there would be no recession in 2008, according to USA Today. Of course, in that year I took the opposite side of that trade and said very bad things were coming. As it turned out I was a tad bit optimistic: Correction, and further thoughts on the topic, How Far Will US Home Prices Drop?, and Is this the Breaking of the Bear? (Yeah, the Bear Stearns and Lehman Brother’s collapse were an easy calls if you read the balance sheets and were realistic about leverage and the real estate situation). This was also about the time I got into it with GGP’s CFO for calling out their insolvency. He called me names, and then they filed for bankruptcy. Of course, they had an investment grade and buy ratings from the ratings agencies and the sell side: BoomBustBlog.com’s answer to GGP’s latest press release and Another GGP update coming… (among over 700 pages of analysis, review the January 2008 archives or search for “GGP” for more research).
In my post “On the Latest Housing Numbers” of Tuesday, November 24th, 2009, I quipped.
Lawrence Yun, NAR’s chief economist volunteered,
“We have seen some bulk purchases by investors, but we are not picking up that data through the Multiple Listing Service or through our release data, but we do know that there is some bulk purchases by investors who plan on releasing those properties within a year’s time, when they see a better market condition.”
I don’t believe “better” market conditions are coming any time soon. We are just coming off of the best market conditions anyone will see in their lifetime. Those market conditions were predicated upon unsustainable conditions, hence they came crashing down. They are crashing down, not crashed – as in past tense. I believe we have some ways to go. That is why I am not buying real estate, and I believe that those that are jumping in now are jumping in prematurely.
Personally, I don’t consider Mr. Yun to be a credible source, either. He may be smart and capable, but the extreme bias of his employer (the ultimate real property perma-bull) and the incredibly biased reports of his predecessor color his opinions by default. He is not nearly as bad as David Lereah (who was literally sensationalist-style perma-bullish) was, but he is still not objective. See The Reggie Middleton Real Estate IQ Test – Who believes the NAR?
This is an excerpt from that post on Tuesday, 08 January 2008
From CNBC.com: Home Sales Seen Holding Steady In Coming Months
Pending sales of existing U.S. homes inched lower in November and should hold steady over the next few months, a real estate trade group said. (I ask, “Why should they do that? Credit is tighter, recession evidence is stronger. Supply is greater, and demand is lower. Hmmm, let me consult the book written by that ex-NAR guru for the answer.” )
The National Association of Realtors Pending Home Sales Index, based on contracts signed in November, dropped 2.6% in November, to 87.6 from an upwardly revised 89.9 in October.
Economists polled by Reuters ahead of the report were expecting pending home sales to decline by 0.5 percent from October’s originally reported 87.2.
The November number was down 20% from a year earlier.
The pending homes sales data suggests that the volume of sales will hold steady for a while before turning upwards before the end of the year, said NAR chief economist Lawrence Yun.
With all due respect to Mr. Yun, Mr. Lereah and the NAR, anyone swift enough to complete the registration form for this blog should know, by now, to discount this association’s data and opinions. They do not do the industry justice with this nonsense. Realtors should actually be the first in the protest line. It is their credibility that is being called into question, for this is THEIR trade group. Credibility is the key!
Notice how accurate that NAR prediction was for 2007 and 2008! We are actually in a real estate depression, and no amount of flowery commercials with cute little girls can counteract this fact.
- In Case You Didn’t Get The Memo, The US Is In a Real Estate Depression That Is About To Get Much Worse
- Further Proof Of The Worsening Of The Real Estate Depression
- Reggie Middleton ON CNBC’s Fast Money Discussing Hopium in Real Estate
So, I query the mainstream media, "At what point do these clowns lose credibility?" For consumers of such media, at what point will you refuse to view said clowns?
I'm not in the business of giving out buying advice to potential homeowners, but if I were a home buyer and I cared about capital depreciation in the near to medium term, I would definitely hold off. I have crunched the numbers for March 2011 and calculated the most recent shadow inventory numbers for subscribers. It ain't pretty. Click here for the PDF summary ( Shadow Inventory Update) and click here for the embedded spreadsheet with the latest numbers, graphs, projections and calculations (note that this is actually a very large model, so be sure to scroll past the first 6 or 7 graph tabs to access the raw data and calculations behind them). You can increase the magnification of your browser if you want a larger view of the embedded model.
Subscribers have access to all of the data and analysis used to create these charts, in addition to a more granular application, by state in the SCAP template and by region in housing price and charge off templates – see
- House price data, 2nd Quarter 2010
- Bank Charge-offs and Recoveries 2Q10
- The very extensive SCAP Assumptions, showing the credit metrics banks needed to submit for the stress tests of 2009, Updated for last quarter on a state by state basis_09082010 Web
The 3rd Quarter in Review, and More Importantly How the Shadow Inventory System in the US is Disguising the Equivalent of a Dozen Ambac Bankruptcies! Wednesday, November 10th, 2010: All paying subscribers can download the full shadow inventory report here: Foreclosures & Shadow Inventory. Professional and Institutional subscribers should also download the accompanying data and analysis sheet in Excel – Shadow Inventory.
The Truth Goes Viral, Pt 1: Housing Prices, Economic Sales and the State of Depression Tuesday, October 5th, 2010