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The late-2006 NAR ad campaign revisited
Thursday, April 17, 2008
In searching for the late-2006 data required for the last post, the ad campaign by the NAR (National Association of Realtors) from that period popped up - it's worth having another look at almost a year and a half later.
Recall that the following full-page ad appeared on at least two consecutive Sundays in major newspapers - this probably influenced more than a few people on their home purchase decisions though the logic of it being a great time to buy OR sell continues to escape me.
As it turns out, notwithstanding the encouragement from former Fed chairman Alan Greenspan, late-2006 was one of the absolute worst times to buy a house. If you bought a house almost anywhere in California, you've probably seen your new place lose $100,000 in value - in some areas, much more.
Should there be any wonder why realtors are getting sued these days?
Shown above is the original version of the ad from early in November of 2006. The next revision of the ad conveniently dropped the "4.3 percent increase in pending home sales" line after pending home sales fell the next month.
Pending home sales are now down more than 20 percent from that period.
That was some pretty awful advice for potential homebuyers.
7 comments:
From what I've seen, the NAR still makes similar claims. Fortunately, the public seems to be figuring out that NAR statements are designed solely to drive home sales, not provide any kind of credible analysis. It's always a good time to buy, trust us!
Hopefully whenever Lawrence Yun or David Lereah appear on TV, the interviewer will hold their feet to the fire for their outrageously optimistic past statements (yeah right).
Also see: Flashback November 2005: NAR States “Foreclosure Risk Minimal”
Completely off topic, but is now a good time to buy Oil too? All those 2006 NAR comments could easily apply to today's oil commodity contracts.
Sorry for taunting the Happy Fun Commodities Bubble. Shame on me!
I generally like to buy when prices are low, for example, about a year ago when oil was closer to $50 than to $150. So, I'd have to answer no to your question. Then again, low is a relative term - today's prices could very well appear to be low sometime in the future.
In all seriousness (and still off topic), most oil importers and refiners would agree with you wholeheartedly on the price (as do I). What all businesses want is value in their purchase. Thing is, according the the most recent EIA report, we currently have 22 days of supply which exactly what we had this time last year (even though current levels were lower, but counting in a decline in demand). Most recent CFTC report shows open positions totalling 1.5 billion bbls of crude floating in the commodities market, and open interest rising.
I'm starting to think the Happy Fun Commodities Bubble is turning into a Buy now or be priced out forever scenario. Thing is, the commercial commodities players are short by around 2:1. Not sure how this is going to end, but at the end of the day, we can always go back to trading tulips if all else fails.
Anyone who thinks commodities is in a bubble will never understand investing.
Investing requires that you grasp the mega-trend, continue to average in all the way up, then sell at the top. This trend will be over when there are massive inventories of all commodities (just like there were massive 'inventories' of dot-com companies and houses). We are no where near that.
According to The Economist, oil is cheap - see Crude estimates
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