Bravo, Lawrence Yun. You’ve made another great call. We’re at the bottom of housing. Finally, there’s a floor. Tell America everything’s okay . . . mission accomplished.
–National Realtors for the Clueless
Much like former NAR chief economist David Lereah, current chief Lawrence Yun has a knack for spinning reality . . . or being clueless.
Even as existing home sales dropped 1.2% in October to a record low of 4.97 million, further proof that the downturn in U.S. housing is worsening . . .
Even as existing home prices fell 5.1% year over year to $207,800 . . .
Even as housing glut increased by 1.9% to 4.45 million units, meaning that we now have a 10.5 month supply glut–the highest since July 1985 . . .
And even as single family home sales fell 20.8% from October 2006 . . . the National Association of Realtors is running headlines that say Mixed Results for October Existing-Home Sales; Mortgages Improving.
Funny, but even worse, here’s what Lawrence Yun is reported to have said on MarketWatch.com:
“As bleak as the data are, the fundamentals of the market don’t support a further decline in sales, according to NAR chief economist Lawrence Yun, who said low mortgage rates and job growth should keep sales from falling. While the sub-prime mortgage market has disappeared, the Federal Housing Administration is picking up its lending.”
Yun says, “I don’t anticipate any further major sales declines.”
Uh . . . what?
The NAR is the same group that tried calling the housing bottom throughout 2006 and 2007 and got it wrong every time. They couldn’t even accurately anticipate sales declines for the past two years.
The reality: Home prices will continue dropping. Glut will continue accumulating. And there won’t be a bottom to speak of until late 2009 or 2010. Housing will still have to survive the trillion dollars of adjustable rate mortgages that are resetting over the next year, which could result in a tumultuous wave of delinquencies and foreclosures.
It’s almost as good as Hank Paulson’s “at or near bottom” housing theories.
