Tuesday, April 22, 2008
In the National Association of Realtors' monthly report on existing home sales, where sales fell 2.0 percent in March (now down 19.9 percent on a year-over-year basis) and home prices continued to tumble (down 7.9 percent from a year ago), NAR chief economist Lawrence Yun had the following comments:
Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets. At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines.If Lawrence had wanted to paint a more accurate picture of current conditions, he might have said something like this:
Look, everyone is scared to death right now - lenders, buyers, realtors - never, ever in a million years did we think that prices would drop like this. I mean, who wants to buy a house that is probably going to lose $20,000, $50,000, or $100,000 over the next year? If you can buy a foreclosed property at a steep discount, have it at. Otherwise, stay away.Here's the chart:
High inventory + low sales = falling prices.