April 12, 2007
A Quick Reversal In Forecasts (And Fortunes?)
“The National Association of Realtors said Wednesday it expects its measure of [U.S.] home prices to fall this year for the first time since the group began keeping track nearly 40 years ago. In its latest monthly forecast, the real estate group said it expects a 0.7 percent decline in the median price of an existing home sold in 2007. A month ago it had been projecting a 1.2 percent increase.”
Keep in mind this represents a non-recession-related decline. And while it is a national rather than local forecast, it is worth mentioning. If for no other reason than the National Association of Realtors' Chief Economist “[David Lereah]…tried to put the best picture on the housing price decline, saying much of it was caused by a sharper slowdown in sales in higher-priced markets along the East and West Coasts.” Wait a second…
∙ Home prices set for first drop in 40 years [CNNMoney]
First Published: April 12, 2007 4:00 AM
Comments from "Plugged In" Readers
Just to put this in some perspective... The NAR has frequently cited the fact that real estate has not gone down in NOMINAL terms since the Great Depression. Seems odd that prices are now going to go down when the economy is "so strong". Hmm. Bubble, maybe?
Posted by: california dave at April 12, 2007 6:34 AM
NO WAY~~~~ really?
I thought "Go to any open house and you'll see that the market is ripping!"
Posted by: blahhh at April 12, 2007 10:08 AM
NAR is a pack of liars on par with Joe Isuzu. The median housing price in real dollars, not nominal dollars, has fallen quite frequently. In fact it was basically flat all the way from 1950 to 1980. I'm sure I don't have to tell SocketSite readers about the Case-Shiller Index.
Posted by: Jeffrey W. Baker at April 12, 2007 10:22 AM
Never a better time to buy? ;-)
You know if these guys are saying it; then reality is much worse.
Posted by: eddy at April 12, 2007 11:28 AM
to pick up on Bakers point, are the business reporters really so stupid to keep using the median price as an indicator of market prices? It's a deeply flawed number who's chief advantage is that is available quickly.
The Case-Shiller index is a much better indicator of prices and it only lags the median by a month or two.
Why the median is still used is kind of mind boggling
Posted by: badlydrawnbear at April 12, 2007 11:28 AM
*sigh* I saw this coming three years ago when all the "creative financing" was in full swing and thriving, and now NAR is finally just admitting to it?
Just wait till the end of this year. Things will only get better ... if you're a buyer, that is.
Posted by: Sexy & Sassy in SF at April 12, 2007 2:26 PM
"Why the median is still used is kind of mind boggling"
As you say, it's easily and quickly produced. In addition, it almost always gives a more positive slant on what's happening to individual house prices than is reality. No wonder NAR loves it.
Posted by: Amen Corner at April 12, 2007 4:32 PM
NAR had also revised their sales forecast down from 6.44M to 6.34M.
Reported today: sales of 6.12M (220K under the revised forecast) and prices down .3% year over year.
The explanation according to NAR "economists": subprime and a cold February. Does anybody actually listen to these jokers?
Posted by: BankerBoy at April 24, 2007 11:19 AM
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